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  • Leasehold Property

    Ground Rent Increase every 10 years

    Just google " Ground Rent over £250 " and prepare to be shocked..


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    This is a shock, so best to by FH if you can, or in the case of a leasehold interest extend the lease with "peppercorn rent" clause after 2 years of ownership. But I agree, not everyone can do this and I can so a number of FTB's tripping up

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    Why is this a shock? Surely its only an issue if you dont pay your ground rent?

    In the same way that if you dont pay your mortgage the lender can evict you?

    what am i missing here?

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    thanks, I did not know this before. Shows there are a lot to learn still.

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    Thanks everyone. I think I was too emitonally attached before.

    So I am going to go back and ask the following:

    Either a change in the clasus to allow for 25 years on ground rent review and no more than double.

    Or a significant reduction in price by £10k to £15k.

    Otherwise I will walk away and look for another property

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    Even a current price reduction could mean that future buyers are put off - as you will obvs want to sell for top dollar at some stage.

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    So, I think if there is a sigifincati reduction that should cater for the price reduction in the future (.... in theory).

    my long term plan isn't to sell anyway., I always thought I am better off re-motraging if I needed the cash... but I guess I can't predict the future.

    I know the solicitor and my mentor suggested that reduction would bring it back in value. And it would been a good investment at the current price if the ground rent werent an issue....

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    OK what percentage of purchase price is the mooted £10k reduction?

    If the base price is say £300k the SD alone at outset is £14000 - and you only recover part of that via CGT reduction at max 28% if you do sell.

    Yes you can later remortgage to around 75% get some cash out - but of course you are then on the hook for the repayments.

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