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Shock Ground Rent Rise Of 3,000%

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Swansea City Council have just informed residents of small private houses on the Elba Estate in Gowerton that their annual ground rent will rise from £50 to an average of £1,500.

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we're all slaves, really. If you're not in debt they'll try to milk you anyway.

This cow is waiting very near the farm fence, and is refusing to come in for milking.

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Swansea City Council have just informed residents of small private houses on the Elba Estate in Gowerton that their annual ground rent will rise from £50 to an average of £1,500.

I felt it was always an "opportunity" to raise that kind of thing. Steer clear of anything that hasn't been changed for many decades, these were set many years ago, and it was reasonable for the time. Now they are "more reasonable".....

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Leasehold means you are renting the most expensive commodity the land, still stuck with all the debt, lack of maneuverability and all the responsibility. ;)

Edited by winkie

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Very true winkie, and prices are barely, if at all, cheaper. There's some seriously foolish buyers out there.

Couple ground rent/lease and add management fees , and the somewhat laughable "affordable" element of a lot of new build housing estate flats becomes the most unaffordable on the estate. The no bed studio flats paying £500 + a year in management fees with the unaffordable homes with the drives etc., paying nothing at all !

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Swansea City Council have just informed residents of small private houses on the Elba Estate in Gowerton that their annual ground rent will rise from £50 to an average of £1,500.

Interesting.

Found the article about this, it seems some of them are going up by 5000%, to £2000 or £3000!

http://www.southwales-eveningpost.co.uk/Gowerton-residents-fearing-homes-rent-rises-5-000/story-21208509-detail/story.html

Makes me certain I would never look at buying a leasehold place.

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Very true winkie, and prices are barely, if at all, cheaper. There's some seriously foolish buyers out there.

But when I bought my first flat, I was young and had no idea about leasehold. The internet didn't exist, and my lawyer didn't explain what it meant, really.

It was very hard for the average non-financial/legal person to find this stuff out.

Now, of course, with the internet you have no f*ing excuse. First hit on google for "leasehold in the UK':

http://www.theguardian.com/money/2013/feb/03/beware-leasehold-cost-more

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But when I bought my first flat, I was young and had no idea about leasehold. The internet didn't exist, and my lawyer didn't explain what it meant, really.

It was very hard for the average non-financial/legal person to find this stuff out.

Now, of course, with the internet you have no f*ing excuse. First hit on google for "leasehold in the UK':

http://www.theguardian.com/money/2013/feb/03/beware-leasehold-cost-more

Indeed. The really shocking thing though, is when I looked at the LR data, I found that the gap has been *closing* for the last 5 years!

Look (this is mean price, CPI adjusted, nationally):

chart.png

post-38621-0-24884800-1402418446_thumb.png

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Freehold.

With gun turrets.

Accept nothing less.

Always amazes me when working out a BTL yield, how much a service charge, or ground rent, can munch in to the return.

Some people seem happy with 3-4%. Strange.

I can remember thinking twice over buying a flat to rent out with a yield of about 9%.

I couldn't sleep at night being a landlawd.

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Always amazes me when working out a BTL yield, how much a service charge, or ground rent, can munch in to the return.

Some people seem happy with 3-4%. Strange.

Funny you should say that, I was just thinking, can leasehold be profitable for BTL?

If not, and BTL wouldn't touch leasehold with a barge pole, then comparing price trends between freehold and leasehold could reveal information about the effect of BTL on the market.

But from what you're saying, I guess not.

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Council pensions aren't cheap.

Bahahahah!

No certainly those two or three annual round the world cruises and Honda X-Trails don't come cheap!

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Is there any limit to how much ground rent the freeholder can ask for, or can they turn around one day and say: "Pay me a million quid a year. If you don't like it, feel free to sell the leasehold to somebody else who will also have to pay me a million quid a year. Good luck finding a buyer."?

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Is there any limit to how much ground rent the freeholder can ask for, or can they turn around one day and say: "Pay me a million quid a year. If you don't like it, feel free to sell the leasehold to somebody else who will also have to pay me a million quid a year. Good luck finding a buyer."?

Well at the moment it's standing at 5000%, that's enough for starters, surely?

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I can see other councils following suit. Will probably sent the value of leasehold properties plummeting. :unsure:

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What happens if you just refuse to pay it?

Bailiffs, bankruptcy, repossession? Would the media and government allow it - they seem rather against evictions at the minute?

Is there any kind of 'right to buy', or even any 'right to renew' when your lease expires? I remember a big fuss a few years ago about houses that are coming to the end of the lease where the land is owned by the Prince of Wales.

All these people queueing up to become serfs to the landowners, and paying fortunes for the privilege. The mind boggles that people can just accept this as normal. The UK needs land reform.

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Most of the people living there are either young families or OAP's who had to downsize.

Very few could actually afford these prices.

Are there any parts of the country outside London where the ground rent for a 2 bedroom terraced little house is £1500?

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What happens if you just refuse to pay it?

Bailiffs, bankruptcy, repossession? Would the media and government allow it - they seem rather against evictions at the minute?

Is there any kind of 'right to buy', or even any 'right to renew' when your lease expires? I remember a big fuss a few years ago about houses that are coming to the end of the lease where the land is owned by the Prince of Wales.

All these people queueing up to become serfs to the landowners, and paying fortunes for the privilege. The mind boggles that people can just accept this as normal. The UK needs land reform.

As far as I know, you are allowed to extend your lease BEFORE it expires. I wouldn't be sure about after it has expired, but if you put it all in motion before that date anyway, then there shouldn't be an issue with it expiring!

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As far as I know, you are allowed to extend your lease BEFORE it expires. I wouldn't be sure about after it has expired, but if you put it all in motion before that date anyway, then there shouldn't be an issue with it expiring!

You can always negotiate a lease extension. In some case, you may have a right to renew, in which case the freeholder cannot refuse an application for renewal on "reasonable" terms.

If the lease does expire, it reverts to a monthly rolling tenancy, just like a conventional tenancy agreement;the freeholder needs to provide notice of rent payable, etc. In advance.

Just remember that the freeholder can charge a renewal fee equal to the resultant uplift in market value of the lease.

Effectively, you'll be paying market price for a similar property unencumbered by a short lease. This can be a big windfall for the freeholder, as effectively they get the HPI.

Edited by ChumpusRex

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