Jump to content
House Price Crash Forum
swissy_fit

Ground Rents - Anyone With Experience Of Buying These?

Recommended Posts

Ah, something I'd be interested in finding out about. It bugs me that I pay £50 a year to company for ground rent. I believe it means that although in time I will own the house, I don't own the land it's on, due to some quirk in English law that allows leasehold.

These ground rents seem to pass between companies.

Share this post


Link to post
Share on other sites

Is there anyone with experience of buying these?

What are the pitfalls?

I imagine the cost of pursuing those who don't pay is an issue...

You see a lot of these at auction. The yields can look pretty good on the face of it, which makes you wonder why they want to sell them.

As you say, I should imagine the cost and hassle of chasing payment is a major issue. Esp. when there's a block of several small properties each paying (or not) a relatively small amount. Which often seems to be the case.

Share this post


Link to post
Share on other sites

Ah, something I'd be interested in finding out about. It bugs me that I pay £50 a year to company for ground rent. I believe it means that although in time I will own the house, I don't own the land it's on, due to some quirk in English law that allows leasehold.

These ground rents seem to pass between companies.

From what I gather its a very lucrative business. The nominal yield is only the starting point. If the freeholder is responsible for maintaining and insuring the leasehold property the reasonable charges can give him a good return. The ground rents are safer than houses. Any arrears will eventually be paid, the leasehold cannot be transferred without the landlords consent. The landlord is unlikely to consent unless any arrears are settled. Alternatively if the property is mortgaged the mortgagee can be approached to pay any arrears. They will usually do so, the amount paid will be added to the mortgage together with their admin charges.

I heard of someone who purchased a large number of ground rents and then contacted all the leaseholders to sell them the freehold to their property. He sold them for double his cost in a short time.

There are agents who sell ground rents, google and you should find some. If you want to purchase the freehold of your own leasehold property you can get the landlords details from the Land Registry and make him an offer.

Share this post


Link to post
Share on other sites

I heard of someone who purchased a large number of ground rents and then contacted all the leaseholders to sell them the freehold to their property. He sold them for double his cost in a short time.

There are agents who sell ground rents, google and you should find some. If you want to purchase the freehold of your own leasehold property you can get the landlords details from the Land Registry and make him an offer.

Are there guidelines for such approaches?

*Surprised as to where this topic ended up! Investments? Hardly, just tying up a loose end and an annoyance.

Share this post


Link to post
Share on other sites

Are there guidelines for such approaches?

*Surprised as to where this topic ended up! Investments? Hardly, just tying up a loose end and an annoyance.

In your shoes I would contact the freeholder and ask how much he would sell the freehold for.

Either write to whoever you pay the ground rent to or get a copy of the property title from the Land Registry, fee of £4 last time I had to get one, and that will disclose the name and address of the freeholder.

But generally ground rents are purchases as reliable long term investments. The reason why many ground rents are so low in value could be that the affect of inflation was not fully realised when they were granted. The payoff comes when the lease expires. Renewal fees or marriage values. The value of the freehold rises exponentially towards the end of the term.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.