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Ground rent - deed of variation for £5000 - worth it?


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I purchased a property through RMP back in 2015 and recently had an “Offer to vary Ground Rent Review Clause” from the Landlord (via their management company).


This variation would remove a 10 year ground rent doubling clause and would instead replace it with a clause which increases the amount of ground rent payable in line with the Retail Price Index (RPI) every 10 years for the remainder of the lease term.


Essentially for the cost of £795 the landlord (Ishguard Limited) are “prepared to offer a Deed of Variation for the reduced premium relative to the value of the reduction of their future income of £5,000.00, payable prior to completion”


I understand this to mean £5,000 would be payable on completion of the variation.


I’ve been trying to understand whether this is beneficial from a personal and saleability point of view.




The ground rent is currently £225 from a lease commencement date of 01-Jan-2015.


I am not planning to sell the property anytime soon so this would mean that that the rent would be:


  • 2015 - £225 per year
  • 2025 - £450 per year
  • 2035 - £900 per year
  • 2045 - £1,800 per year
  • 2055 - £3,600 per year


After this point I’ll be long gone so no worth worrying about :)


Based on this changing to RPI seems to make sense since this increased circa 30% over the last 10 years as opposed to doubling… 


My question is based on this is it worth doing - I keep flipping as to whether this makes financial sense or not?




The letter I received states that “concerns have been raised around the saleability and mortgage ability of properties that have leases containing such clauses.”


I seem to remember reading about these a while back but was wondering if anyone else had a similar view as to whether these clauses are a negative from a saleability point of view?


Thanks for reading this far and I would genuinely appreciate any responses, even its to just confirm my thinking (which is that this seems worth doing).

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Hi Mike,


I can share my thoughts and experience on this matter. First time I'm posting here although I follow the market closely.


I am going through a Deed of Variation process on a flat I bought from Taylor Wimpey (TW) in 2015. Ground Rent clause was similar i.e. doubling every ten years. They are paying all the costs to move to 'increases in line with RPI'. It's a special scheme they are running. I suspect it's because of the bad publicity and govt. pressure they have faced recently.


£5k seems like a lot but I know a few lenders have raised concerns or blocked mortgages when ground rent is greater than 0.1% of property purchase price and/or has this doubling every 10 year clause (rather 25 years or RPI). So if your property is worth <£225k, it may already make it harder for you or a future buyer to secure financing.


One question for you though. I didn't get the bit about £795. What cost is that? Is the landlord saying you pay that and they lose £5k of potential future income. In my case although TW is paying the cost, I have been told it is around £800..




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Thanks for responding, it's hugely appreciated.


Regarding the £795 - the letter states that the "developer Cedar Country Homes Limited has not offered any such assistance scheme which would fund the removal or replacement of the 10 year doubling clause in your lease...the offer is subject to a payment of £795 (no VAT payable) in order to cover our client's legal and administrative costs of dealing with the preparation and grant of a Deed of Variance".


Basically I have to pay the developers admin fees.


I agree the £5k seems high - this basically wipes out any capital gains thus far which is why I was interested in others opinions as to whether this was worth it or not...

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  • 1 month later...

Hi, just wondering if you went ahead with this?


I've had an offer accepted on a 2 year old development flat in Birmingham and have only now come across this as the valuation report came back as £0 due to the same reason as you. Ground rent is £350 and doubles in 10 years then goes up with RPI. Quite frustrating and I'm trying to work out what my options are...the developer has sold on the freehold, I wonder if possible for me to get a deed of variation?





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I haven't gone a head with it (yet) - there was no closing date on the offer so I'm bidding my time with it at the moment. 


I think I probably will do this but I have until 2025 to commit to it or not.


It's worth mentioning that the option to do this can from the freeholder - it's not something that I initiated.

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That's unlucky. I thought they may down-value it slightly because of such a clause but surely the property is not worth £0! Although I believe some lenders now do not lend on such flats. Who was your mortgage provider and valuer out of interest? Thanks.

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Yes i think the valuation was essentially £0 because they said 'the ground rent clause may affect future saleability' therefore creating too much of a risk for this particular lender. That was with Virgin Money, I have been told TSB would have accepted it, but I'm not sure i want to proceed on this basis. Am currently exploring via the vendor options for deed of variation to remove the doubling at 10 years.

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  • 5 months later...

Kind of - I’ve decided that I will be going ahead with the deed of variation primarily due to fear that not doing it will affect future saleability, but since there is no deadline associated I’ve got some breathing room so it’s on the list to resolve. 

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  • 1 year later...
  • 2 weeks later...


I am currently in the process of sorting this out. My solicitor advised it is circa a 4 week process.

The clincher was during a discussion with the solicitor when they said "it makes sense to get this done since selling the property to anyone who is not a cash buy could prove difficult.  Lenders don’t like these rent doubling leases and often won’t lend.  It just unfortunate that it’s going to cost you to sort it out."

I knew this anyway but hearing it from the solicitor just hammered it home as something that needs sorting. It was a decision purely made to ensure the saleability of the property in the future.

Its not great is its wiped out any capital gains from the last 5 years.

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Hi All, 

I was wondering how everyone in this thread is getting on with this issue?  I am also faced with the same. 

Interestingly, my landlord is also Ishguard Limited and they approached me with the £5k amendment offer and £795 costs - though only a month before their letter I had been informed there was an issue with our lease (not highlighted by solicitor at point of sale - a separate topic!) 

The £5k premium converts the "doubling every 10yrs" to "linked to RPI every 10yrs", and the ground rent remains the same at £349pa. 

I'm actually keen to sell my property in the next 1-2yrs, and so am thinking I have to resolve this clause first. From what I understand, there are actually 2 (potentially 3) issues with my lease: (1) the doubling clause, (2) the ground rent @£349 (property is outside London), and (3) the 10yrs?  - though I think this is less of a concern. 

I've spoken to Lease and several solicitors and as far as I see it, my best 2 options are:- proceed with the amendment above or serve a section 42 "statutory lease extension" 

The amendment fixes problem (1), but i'm worried that my property would still be unmarketable due to (2) the High Ground rent. The freeholder has NOT offered to lower this in this £5k premium. Does anyone know if this high ground rent would still pose a problem for selling if I was to proceed and remove the other onerous clauses? 

The statutory lease extension seems the safest all round bet from a sales point of view, since it will extend the lease by 90 yrs and remove the ground rent to a peppercorn rent (hence eliminating the high ground rent & doubling issues). But this comes at a price. The Premium looks to be around £7k (though this is an estimate, I will confirm from a valuer) - but this route also includes valuers, my solicitors fees and a "contribution to the freeholders legal + valuation fees". All in, I think im looking at around £13k.

So, I would to know everyone's thoughts. Do I pay the £5k option and risk still not having a sellable property with high ground rent, or pay £13k?

Sorry for the long message, and thank you for reading! 

All the best, Lee



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  • 7 months later...

Hi - I have similar issue to others on this thread, but perhaps my case shows the lenders are really becoming weary in the current times.

I am trying to sell my leasehold flat and have had 2 buyers pull out now due to lenders objecting to a clause in lease agreement with escalating ground rent.

I bought the flat new from Bellway Homes in 2013. It came with a 8 year fixed period ground rent of £250 p/a. Then every 5 years after the cost raises in line with RPI (average of about 1.5% p/a). This is far less then some of the ground rent doubling clauses I hear of and read above, but lenders are still refusing to agree to this which is worrying me now as I'm struggling to sell!

I have asked the freeholder to do a deed of variance but they have simply rejected!

I thought maybe if I serve a Section 42 then I can perhaps negotiate the clause or move to a peppercorn rent but not sure yet at what cost. Any other ideas what can be done?


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Thanks for sharing. Not going to lie - after spending a small fortune to change the doubling clause to be one based on the RPI, I’m now hearing your story and concerned I’m stuck with an unsellable liability as opposed to an asset ... 

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