Business

Ground rent completely banned – how it affects you and which homes fall under it

Rip-off ground rents will end for new rentals from June 30, but government help for homeowners already locked in high annual fees could take years

For sale, under offer and sold signs, West Hampstead, London
High base rents will end for people buying new rental housing

Hundreds of thousands of households on punitive basic pensions will be exempted under new rules effective June 30.

Many leaseholders pay large annual ground rents to their landowner, the ultimate owner of the property.

But many people find themselves in the trap of paying staggering amounts of money, which combined with a mortgage, can make it feel like they’re paying rent on a property they own.

In the worst case, these ground rents double every 10 to 15 years.

Leasehold for new rental apartments is now prohibited from June 30th.

This is because of new legislation, the Leasehold Reform (Ground Rent) Act, which comes into effect on property in England and Wales on the last day of June.

The law means base rents for new homes will be zero, freeing homeowners from rip-off fees.

The ground rent ban also applies to retirement homes, but no earlier than April 2023.







Countrywide Properties has agreed to end the practice of doubling ground rents
(

Picture:

Alamy Stock Photo)

What is basic pension?

This is the annual fee that a tenant pays to the landowner who ultimately owns their home.

This is paid for by homeowners who mostly live in apartments, but also by people who live in many senior citizens’ villages.

The basic rent can be paid for maintenance work on the house and grounds. However, it is often a rip-off fee intended to make money for the owners.






Tenants pay an annual fee to their landowner or landlord

In the UK, leasehold owners pay an average of £319 in leasehold expenses each year, totaling £447m.

Tenancy Secretary Lord Stephen Greenhalgh said: “This is an important milestone in our work to repair the tenancy system and improve home ownership.

“By eliminating these unreasonable costs, the dream of home ownership will become more affordable for the next generation of homebuyers.

“I applaud the move by many landlords who have already zeroed base rent on their new leases, and I urge others to follow suit before it becomes law.”

What is lease?

Leasehold is a common form of property ownership in the UK that is rare elsewhere.

A leased home is not wholly owned, even if you have a mortgage.

Instead, it is leased from a third party – the landowner.

What happens to existing tenants?

The government has promised a second law to help people with leasehold properties now.

However, this law is still being drafted by the government and help could still be years away.

Existing tenants can reduce ground rent to zero by extending their leases, but this can be a costly and lengthy process.

The government’s planned new law promises to facilitate this process.

Some current tenants have been voluntarily released from their contracts by their landowners.

More than a dozen companies have lifted “unfair and unjustified” conditions for homeowners that make it difficult for them to sell their property and sometimes keep them stuck in unaffordable homes.

Continue reading

Continue reading

https://www.mirror.co.uk/money/ground-rent-completely-banned-how-26795134 Ground rent completely banned - how it affects you and which homes fall under it

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button