Houses across the country may be burdened by a contract clause that allows ground rent to be doubled every 10 years.
In what has been described by MP’s as a ‘national scandal’, homes across the country have been sold to buyers as leaseholds with challenging ground rent provisions. This has left homeowners stuck in contracts which increase their household spending every 10 years.
With the freeholds of these properties being sold off by developers to private companies, the burden is ever increasing. It has become more and more difficult for homeowners to purchase the freehold title to the property, leaving them stuck with the ground rent burden.
To try to tackle this problem, developer Taylor Wimpey has now set aside £130million after having reviewed the lease agreements it has drawn up over the past 10 years which it says have resulted in “unintentional financial consequence”. The company has said it will now consider ways in which it can assist homeowners, either by negotiating a reduction in the ground rent due, or other means. It remains to be seen how the homeowners affected by these contracts will be compensated.
If you purchased your new home as a leasehold property you may be affected by these excessive ground rent clauses. Contact a member of Jordans professional negligence and property team on 033 0300 1103 who will advise you on your legal rights.