An online version of a UK newspaper has published an article about leasehold houses and ground rents. A leasehold house is one in which the owner owns the house but not the land. The homeowner has to pay rent to the owner of the land. In the past this rent (ground rent) was only one pound a year. But recently owners have been charging rent. The average rent is 371 pounds a year but can go up to 10,000 pounds by 2060. The government is trying to ban leasehold purchases and reduce ground rents to zero.
Key Takeaways:
- A British leasehold property puts the purchaser in the position of being a tenant, albeit with a long rental.
- As a tenant the buyer pays rent to the freeholder and must get permission should he wish to make any amendments to the property.
- Post-2000, developers began escalating rents, by inserting clauses into leasehold agreements that even doubled monies owed, in ten year increments.
“It is estimated that seven out of ten buyers of recently built leasehold homes used the conveyancing solicitor recommended by the developer.”