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Challenging unreasonable ground rent on leasehold homes

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If you have bought a new home in the last few years, then there is a chance that you will own your property on a leasehold as opposed to freehold basis. If this is the case, then you may be liable to pay ground rent charges to the person who retains ownership of the land on which your home is built. Where the amount you have to pay seems unreasonably high, or where provision is made for it to double every five to ten years, then we would urge you to talk to us to see if we can help you get the charges reduced or even cancelled.

As Selwan Yousif, civil litigation lawyer with Bailey & Cogger in Tonbridge, Kent explains, ‘Charging ground rent on new homes has become increasingly commonplace, and there has been concern for some time that where the charge is set too high this may place an unfair burden on homeowners and make it difficult for affected properties to be sold or mortgaged.’

To address this problem, the Government is going to introduce new legislation which will effectively ban the imposition of ground rent charges on most new homes going forward. In addition, many developers who have previously sold homes on a leasehold basis (with ground rent obligations attached) have now launched voluntary schemes to help affected homeowners. There are also many landlords and property investors who are following suit.

What is ground rent?

Ground rent is a periodic charge that is levied on a property when it is sold on a leasehold basis as opposed to a freehold. It is supposed to reflect the value of the ground on which the property has been built – which you may be surprised to learn that you do not actually own when your home is leasehold. Historically, ground rent levels tended to be very low but in recent years they have begun to creep up in value.

How is leasehold different to freehold?

When you buy your home on a freehold basis, you are buying the property and the land on which it sits, outright.

In contrast, when you buy your home on a leasehold basis you are buying the right to live in the property for a set period of time (which may be as much as 999 years). This is subject to a number of conditions – one of which will usually be that you agree to pay a regular ground rent charge to the person who owns the land on which your property was built.

What is the ground rent problem?

Where the amount you have to pay under a ground rent charge is only minimal and will stay the same for the entirety of your lease, then you are unlikely to experience any problems.

However, where the charge is high or there is a clause in your lease which provides for the charge to be doubled every five or ten years, then you could find yourself in a position where you can no longer afford to pay the amount due. It may also become difficult to sell your property on later if there are no lenders who are willing to offer a mortgage on it.

This is a problem that is facing many homeowners right now, including a lady called Carole Patterson whose plight attracted a lot of media attention.

The case of Carole Patterson

Ms. Patterson bought a one-bedroom flat in East Dulwich, South London for £170,000 in 2011.  Initially her ground rent was £262.50 per year, but because of a term in her lease which provided for the sum payable to be doubled every five years, she was having to pay £525 a year by 2016 and £1,050 in 2021, and now faces the prospect of having to pay £16,800 a year by 2036, and over £1 million a year by 2066. Needless to say, this has put her in a desperate position, and she has turned to lawyers to seek a remedy.

How we can help

Our dispute resolution lawyers are experts when it comes to handling leasehold claims and are on hand to help you to understand your options for dealing with unreasonable ground rent charges.

We can review your leasehold contract so you are clear about where you stand, and advise you on whether the developer who built your home (or anyone to whom the land on which your property sits has been sold) has signed up to a scheme which may give you a way out.

For example:

  • Persimmon Homes are operating a scheme which gives leaseholders the ability to buy the freehold of their home for a discounted rate so that the obligation to pay ground rent is extinguished;
  • Countryside Properties have recently agreed to remove onerous ground rent provisions from their leasehold contracts; and
  • the insurance company Aviva (which buys property portfolios) has agreed to repay homeowners who have signed up to leases that they now own and where ground rent charges periodically double.

Where no such scheme exists, we can contact the developer or the person to whom ground rent charges must now be paid, to see if they are willing to help you out on a discretionary basis.  They will generally consider this, especially in cases where we can demonstrate that the charges your face are excessively high.

In a case where it can be shown that you were not properly advised about your ground rent obligations at the time your home was purchased, then we might be able to help you bring a professional negligence claim against your conveyancer which could entitle you to recover not just any ground rent charges you have already had to pay, but possibly the cost of acquiring the freehold to your property and any legal fees that you have to incur.

To find out more, please contact Selwan Yousif on 01732 353305 or email

Bailey & Cogger has offices in Tonbridge, Gravesend, Maidstone, Chatham and Tenterden.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.