Despite the problems caused by the notoriety of the ground rent scandal , a majority of the homeowners are adamant on paying the ground rent on an annual basis. However, the ground rent is escalated to raise on an annual basis, and it has made the leaseholders skeptical regarding their decision to stick to their leasehold properties.
Leasehold and freeholders should address the raising problems with the ground rent, and they should suggest a strategy to combat the problems. Let’s have a look at the problem with doubling ground-rent clauses:Issue with doubling ground-rent clauses:
While the issue with the ground rent scandal has subsided, there is another problem knocking at the doors of leaseholder and freeholder. It is likely to become challenging for a leaseholder to sell the leasehold property, which is more likely to endure a double-rent charge that is likely to increase a time span of 10 years.
For instance, if you purchase a house in 2011 with an initial ground rent of £350 per annum, it is likely to get doubled after every 10 years. So at the end of 10 years, a leaseholder might be inclined to pay nearly £12,000 as the ground rent on an annual basis, which is not a good news for the leaseholders.
The doubling of the ground has influenced the marketability and mortgage-ability of the lease, and it might also affect the process of selling the property, when purchasing a property with such exorbitant clause.
Keeping the problem in consideration, a majority of the lenders might not be too pleasant with the idea of paying mortgage on a property, whose ground rent is likely to double on an annual basis. There should be a strategy to avoid the payment of such outrageous rent on an annual basis.