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Gowerton Residents Facing 5,000 Per Cent Hike In Ground Rent

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'We have been told it's legal, but it is not morally right' - Gowerton residents facing 5,000 per cent hike in ground rent

A DECISION to increase annual ground rent on homes on an estate in Gowerton by up to 5,000 per cent has been branded "legal, but morally wrong".

There are warnings people on fixed incomes such as pensioners will not be able to pay their bills while young families on tight budgets could even lose their homes.

People living on the Elba estate have been told their yearly bills will be shooting up from between £50 and £75 a year to around £3,000.

Letters outlining the new valuations, which Swansea Council said were based on an open market value, dropped through letter boxes on the weekend. But the county councillor for the area, Sue Jones, has reacted angrily to the increases.

Read more at http://www.southwales-eveningpost.co.uk/told-s-legal-morally-right/story-21215042-detail/story.html#K5MqP3Q1reqVxsIR.99

It appears that the leaseholder is the City Council and that they are the ones increasing the leaseholder charges. My first thought was what is stopping the Council doing this to other leaseholders in the city or the owners of other leases doing likewise.

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It appears that the leaseholder is the City Council and that they are the ones increasing the leaseholder charges. My first thought was what is stopping the Council doing this to other leaseholders in the city or the owners of other leases doing likewise.

It depends on the lease. Some leases have a provision that the ground rent may be reviewed from time to time (every 25 or 50 years).

Not all leases have this clause, and if they don't, then the ground rent is fixed for the life of the lease. However, some historic leases do, and it has also made a recovery in the last 3 or 4 years.

There is still a requirement for the ground rent to be reasonable (as judged by a leasehold value tribunal) but market rate is, by definition, reasonable.

Edited by ChumpusRex

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