Ground Rents and New Build Properties

The issue of ground rents and leasehold houses in particular has been getting a significant airing in the press recently. Here is some more background to this issue.

Particularly vocal in this area have been the Leasehold Knowledge Partnership, see their website for more about the news of their campaigns. In particular, an All Party Parliamentary Group has called for more to be done about the issue and has published its own proposals which can be viewed here:

This issue continues to gather momentum and has had plenty of airing in the mainstream press.

Lenders are also starting to now take an issue in rising ground rents and at the start of this week we had the announcement from Nationwide that it would be looking closely at new build properties that are leasehold. Specifically, new leases of flats will need to be for a minimum term of 125 years and for houses 250 years.

Ground rents are to be 'reasonable' at all times during the lease and escalation should be by reference to a verified index such as the Retail Price Index, rather than doubling every five, ten or fifteen years.

Existing properties are not affected on sale or remortgage but these provisions will apply to new build property.

Nationwide Leasehold Policy May 2017