Search our news, events & opinions

21 November 2016 0 Comments
Posted in Property Disputes

Buyers beware: leasehold and ground rent trap

Author headshot image Posted by , Paralegal (Senior)

Jacqui Walton discusses the plight of unsuspecting new build buyers caught out by onerous ground rent review clauses.

You may have seen coverage in the press recently of the plight of unsuspecting new build buyers caught out by onerous ground rent review clauses. The seemingly affordable ground rent required by some long leases has the potential to escalate over time, leaving some leasehold owners unable to sell.

Developers are increasingly selling new build houses as leasehold instead of freehold, with some ground rents doubling every 10 years. As a result these owners are liable to pay ground rent to the freeholder that will spiral to thousands of pounds a year.

Many owners have become stuck with properties they are unable to sell as some banks are unwilling to provide mortgages to prospective buyers if the lease provides for a dramatically escalating ground rent.

Developers are also selling long leases with the possibility of flat owners purchasing the freehold at a relatively low cost after only a few years. This may seem reassuring but many owners have discovered that when the time comes to purchase the freehold, it has either been sold to a third party without their knowledge or they are only able to purchase the freehold for a disproportionate sum.

It is therefore essential that you understand the ramifications of purchasing a long term lease, the possibility of purchasing the freehold and the costs involved before committing yourself to any purchase.

If you are in the process of purchasing a leasehold property, the Property Disputes Team at Royds Withy King can provide you with expert legal advice before you buy and ensure you aren’t caught in the ground rent trap.

0800 923 2064     Email

Leave a comment

Thank you for choosing to leave a comment. Please keep in mind that comments are moderated and please do not use a spammy keyword or a domain as your name or it will be deleted.




Property Disputes

Keeping you informed about Property Disputes news, events and opinion.

Paralegal (Senior)

T: 01225 730 154 (DDI)

Search our news, events & opinions