What’s the problem with a ground rent clause?
Recently, the press have highlighted leases where the ground rent doubles every 10 years.
Whilst this was historically accepted by lenders, and would have been highlighted to the purchaser during their purchase of the property, lenders are changing their policy in this respect. It is growing increasingly more difficult to find a lender willing to lend on a property with a doubling ground rent so selling or remortgaging such a property is going to become more and more troublesome.
The result of this is that one developer, Taylor Wimpey, have put into place a scheme to help customers who purchased a property from them with a doubling ground rent lease, to convert that to an alternative RPI (Retail Price Index) basis. Part of the scheme is that they will pay up to £750 towards the customer’s legal costs for making this change, by way of a Deed of Variation. Valentine & Co have acted in a number of these cases and successfully varied the leases, and because of the contribution paid by Taylor Wimpey, there has been no cost to the client.
“Valentine & Co have acted in a number of these cases and successfully varied the leases, and because of the contribution paid by Taylor Wimpey, there has been no cost to the client.”
Seek unbiased, professional advice
There unfortunately appears to be a small number of legal firms trying to take advantage of the situation are contacting owners out of the blue suggesting a lengthy and expensive legal process instead.
We don’t know how long the Taylor Wimpey scheme is going to be available for, so we would suggest not delaying your decision and would certainly suggest that you avoid entering into a potentially lengthy, expensive and stressful process when there clearly may be an alternative solution available to you.
If you own a Leasehold property and you think it does, or may have, a doubling ground rent, please feel free to contact us for professional, unbiased advice on what your options are.