Is it time to buy ground rents?

Is it time to buy ground rents?

14:14 PM, 22nd January 2021, About 5 months ago 3

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Given the changed proposed to leasehold/freehold, I’m wondering now if it’s the time to be ‘mopping’ up the Freeholds of a block of flats where I have a few units.

The Freehold was applied for nearly a year ago, and I was the ‘white knight’, but now if we are to be able to extend leases and have no ground rent I feel that this is an option no longer viable – unless I’m misunderstanding things.

I know it could be a way off but this was to be a long term investment but no point and the ground rent will be diminishing.

Anyone any ideas?

Harlequin Gardens



Comments

by Smartermind

16:24 PM, 25th January 2021, About 5 months ago

"Millions of leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent, the Housing Secretary Robert Jenrick has announced today (7 January 2021)". https://www.gov.uk/government/news/government-reforms-make-it-easier-and-cheaper-for-leaseholders-to-buy-their-homes

It would seem you have got hold of the wrong end of the stick. With the proposed changes there is no commercial benefit to accumulate Freeholds as there would be no ground rent. However for a leaseholder, they should hold off for the changes to be implemented and then buy out the freehold or just leave it as their ground rent will be frozen or zero. So it would appear your brilliant idea of "mopping up" the freeholds is misguided and long past its sell by date!

by Harlequin Garden

16:47 PM, 25th January 2021, About 5 months ago

Reply to the comment left by Smartermind at 25/01/2021 - 16:24
Thank you - when the Freehold bid started this wasn't on offer - I did flag it to those leading on the Freehold before they submitted probably a year ago and have warned them that I may be dropping out due to this, obviously they are now very quiet on the matter. It wasn't a 'brilliant idea', it was at the time a way to get the Freehold done (over 3 years in the talking and organising) and nothing on the horizon regarding these new announcements by Mr Jenrick. Thanks for confirming my view - no one else is, but we've yet to see this - but then who would have thought S24 would have been brought in.

by Puzzler

7:38 AM, 26th January 2021, About 5 months ago

If this was to be long term, then buying the freehold between the leaseholders is still a good idea as then you can manage your own expenditure and do away with ground rent anyway. Whether it's worth waiting will depend on the length of the lease and I am sure the proposals will make some allowance in favour of freeholders. It's not clear if this is what you intended though, if it's a few of you only and you were buying for your own profit then probably not.


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