Pulled out again due to onerous Ground Rent increasesMake Text Bigger
I have just pulled out, again, from the purchase of a new-build flat due to the onerous Ground Rent increases in the lease. In the first lease, which was for 2 flats in Birmingham, the ground rent of £250 increases every 10 years linked to RPI. In the second lease, which was for a flat in Manchester, the ground rent of £254 increases every 5 years linked to RPI! Plus, no ceiling to the rise in Ground Rent is given, so on a 300 year lease, the increase could be massive.
Another problem this causes was explained by my solicitor. If ground rent is greater than £1000 in London or £250 outside of London, the lease is viewed as an AST and not a lease! This means that if you are a homeowner, your home can be taken away from you without legal redress, should you fall behind on Ground Rent payments!
I know that developers want to make money after the build is completed, but when big banks like Nationwide and Santander stipulate that ground rent should be no more than 0.1% of the value of the home, how can purchasers be sure that they will find a mortgage when it comes to completing, and selling or remortgaging in the future.
I will not be buying a new build now or in the future until this is changed.
Your thought or comments would be appreciated.
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