Leasehold purchase and ground rent fear?
My daughter is about to exchange on the purchase of a new flat within a converted house.
The ground rent is £300 per annum increasing every 10 years by the prevailing inflation rate at the time.
I am aware of the scandal surrounding leases with ground rents doubling every 10 years as high lighted by our friend Patrick Collins, I think, from The Guardian.
I am just wondering whether an increase by inflation is really any better or should we just walk away and find a property with a more conventional ground rent arrangement?
I am aware that increasing ground rents every 10 years are the way things are going.
Thanks
Chris
24 comments on this article
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IMLA blame 80% decrease in BTL investment on government policies
Member Since July 2017 - Comments: 465
1:18 PM, 10th February 2018, About 9 years ago
This assumes no time lag between inflation and incomes. At the moment due to austerity measures peoples average incomes are not rising by 3.6%, one of the latest RPI figures. I lived and worked through the high inflation of the 1970’s and the 1980’s and peoples incomes were always lagging behind inflation.
Member Since July 2013 - Comments: 1268 - Articles: 1
2:25 PM, 10th February 2018, About 9 years ago
Reply to the comment left by at 10/02/2018 – 11:30
Ha ha you are probably right but we can hope. There is a consultation in progress. I think it’s closed now but keep an eye out. There is a conference coming up about it. I might go, it is not expensive
Member Since July 2013 - Comments: 1268 - Articles: 1
2:27 PM, 10th February 2018, About 9 years ago
Reply to the comment left by Ian Cognito at 10/02/2018 – 12:11
Trouble is inflation is a can of worms and not even-handed.
Read this case:
http://www.bbc.co.uk/news/uk-wales-south-west-wales-33071504
Member Since April 2014 - Comments: 22 - Articles: 2
9:33 AM, 12th February 2018, About 9 years ago
Thanks to everyone who has contributed to this thread. One thing is clear; I will scrutinise very carefully the ground rent provisions in any future leases I contemplate buying…..