Ground Rent

[Burndens Bogs]

Another worry is, these companies that buy leaseholds from developers - if they then decide to sell, it could end up in the hands of anyone.

The majority of houses in Bolton are freehold. The majority of houses in Wigan are leasehold.

Edited April 11, 2022 by Burndens Bogs

[Tonge moor green jacket]

4 minutes ago, Burndens Bogs said:

Another worry is, these companies that buy freeholds from developers - if they then decide to sell, it could end up in the hands of anyone.

The majority of houses in Bolton are freehold. The majority of houses in Wigan are leasehold.

I don't understand that.

Don't these companies buy the leasehold? The leasehold is owned by the initial landowner (often developer) and then may be sold at a later date.

The property is freehold once the leasehold has been bought, and remains with the property.

Unless there's something else going on.

Edited April 11, 2022 by Tonge moor green jacket

[Duck Egg]

5 hours ago, C86 said:

One thing I've found recently is there is also Rent Charges which gets confused with Ground Rent.

My house is freehold but I pay £2.40 rent charge per year, this is until July 2037 when they extinguish. I'm looking at buying it out which is simply number of years left x rent charge plus any fees to the land registry. Makes it easier when selling.

https://www.gov.uk/guidance/rentcharges

 

 

 

 

I'd never heard of this.  I aways thought you were a freeholder or a leaseholder paying ground rent.  A freeholder paying rent charges sounds like a contradiction. 

Mate of mine in a mid terrace in Horwich years ago, had a bloke knock on the door and ask if he wouldn't mind collecting all the ground rents off his neighbours;

"Do I get anything for my trouble?"

"No"

"Who normally does it?"

"Residents in the end properties"

"I live in the middle, why are you asking me?"

"Nobody in the end properties wanted to do it"

Needless to say, he declined.

 

[Burndens Bogs]

24 minutes ago, Tonge moor green jacket said:

I don't understand that.

Don't these companies buy the leasehold? The leasehold is owned by the initial landowner (often developer) and then may be sold at a later date.

The property is freehold once the leasehold has been bought, and remains with the property.

Unless there's something else going on.

There are companies that buy the leaseholds, then sell to another company at a later date.

The house remains Leasehold, but the home owner pays to a different company.

[Tonge moor green jacket]

2 minutes ago, Burndens Bogs said:

There are companies that buy the leaseholds, then sell to another company at a later date.

The house remains Leasehold, but the home owner pays to a different company.

Aye, I get that.

Your initial post said they buy "freeholds". It confused me, but I presume you meant leaseholds!

 

[tomski]

42 minutes ago, Duck Egg said:

I'd never heard of this.  I aways thought you were a freeholder or a leaseholder paying ground rent.  A freeholder paying rent charges sounds like a contradiction. 

Mate of mine in a mid terrace in Horwich years ago, had a bloke knock on the door and ask if he wouldn't mind collecting all the ground rents off his neighbours;

"Do I get anything for my trouble?"

"No"

"Who normally does it?"

"Residents in the end properties"

"I live in the middle, why are you asking me?"

"Nobody in the end properties wanted to do it"

Needless to say, he declined.

 

Haha collect yourself you lazy bastards.

[Burndens Bogs]

35 minutes ago, Tonge moor green jacket said:

Aye, I get that.

Your initial post said they buy "freeholds". It confused me, but I presume you meant leaseholds!

 

I did! Apologies, i’ve edited now

[only1swanny]

We have ours with Compton Group, bunch of sharks..

We've asked for a quote to buy the leasehold and were offered a "reserved leasehold", which I'm led to believe makes the property freehold. 

£800 inc solicitor fees

[Sweep]

8 hours ago, Burndens Bogs said:

Trouble is, a lot of the old land owners are selling to sharky type London based companies who take the piss with price increases & if you accidentally miss a payment they hit you hard.

The best thing i ever did was buy the freehold on my property a few years ago. The landowners offered it to me for £1250 (3 bed semi, decent sized plot) I said as it’s Christmas i could only afford £700, they said “Ok, it’s yours”

Are they London based companies, these "sharky types" or is that a bit of an assumption?

[Tonge moor green jacket]

4 minutes ago, Sweep said:

Are they London based companies, these "sharky types" or is that a bit of an assumption?

Simarc the cunts are in Borehamwood, which is close enough.

[Traf]

18 minutes ago, Sweep said:

Are they London based companies, these "sharky types" or is that a bit of an assumption?

It's a fair assumption to anyone oop North.

[tomski]

39 minutes ago, Sweep said:

Are they London based companies, these "sharky types" or is that a bit of an assumption?

My ground rent bloke was based in Bolton and a living tit who wouldn’t speak to me.

[Jol_BWFC]

3 hours ago, Burndens Bogs said:

I did! Apologies, i’ve edited now

You were right, companies buy up the freehold interests as an income stream.

Case study

Developer owns freehold title to a piece of land. He builds a block of 100 flats and then leases each flat to people to live in for (say) 125 years. The leases reserve a ground rent of (say) £100 a year. Management company is set up to manage the block. 

The developer continues to own the freehold title to the whole plot of land, but has no management responsibility - that lies with the management company (which is owned by the tenants - one share each).

The people who paid for the leases of the flats (ie the tenants for 125 years) then each own the leasehold title to their individual flats.

Freeholder is owed £100 every year from the tenants of the 100 flats. He will get £10,000 pa.

Developer then sells the freehold interest to a company who wants to buy a guaranteed income of £10,000 per year for doing nothing.

[MickyD]

1 hour ago, only1swanny said:

We have ours with Compton Group, bunch of sharks..

We've asked for a quote to buy the leasehold and were offered a "reserved leasehold", which I'm led to believe makes the property freehold. 

£800 inc solicitor fees

Compton Group bought up a load of freeholds from the landowners in order to exploit covenants written at the time of building. They own a lot of the land around Canon Slade School. The Oaks estate and Danesbury Road on the other side of the school. A few years ago Compton Group wrote to all those who pay ground rent to them and informed them they had to buy buildings insurance from their preferred insurer. Many of the residents successfully fought the instruction but I’d imagine some signed up for the new insurer.

https://publications.parliament.uk/pa/cm200102/cmstand/d/st020124/pm/20124s07.htm

[only1swanny]

1 hour ago, MickyD said:

Compton Group bought up a load of freeholds from the landowners in order to exploit covenants written at the time of building. They own a lot of the land around Canon Slade School. The Oaks estate and Danesbury Road on the other side of the school. A few years ago Compton Group wrote to all those who pay ground rent to them and informed them they had to buy buildings insurance from their preferred insurer. Many of the residents successfully fought the instruction but I’d imagine some signed up for the new insurer.

https://publications.parliament.uk/pa/cm200102/cmstand/d/st020124/pm/20124s07.htm

We've had it out with them over insurance.  Now sorted the issue. 

Buying the lease as they're just money makers. 

[Tonge moor green jacket]

On 11/04/2022 at 20:08, Jol_BWFC said:

You were right, companies buy up the freehold interests as an income stream.

Case study

Developer owns freehold title to a piece of land. He builds a block of 100 flats and then leases each flat to people to live in for (say) 125 years. The leases reserve a ground rent of (say) £100 a year. Management company is set up to manage the block. 

The developer continues to own the freehold title to the whole plot of land, but has no management responsibility - that lies with the management company (which is owned by the tenants - one share each).

The people who paid for the leases of the flats (ie the tenants for 125 years) then each own the leasehold title to their individual flats.

Freeholder is owed £100 every year from the tenants of the 100 flats. He will get £10,000 pa.

Developer then sells the freehold interest to a company who wants to buy a guaranteed income of £10,000 per year for doing nothing.

Saying the same thing in different ways.

The freeholder owns (or owns the rights) to the land, but that entitles them to collect money from leaseholders. 

Iirc, there is a maximum such an organisation can charge a leaseholder to purchase the freehold for the property. 

I suppose that's the balance such a group must make-when to start selling them. 

I suppose that if the costs of management aren't significantly less than the value of the rents then its barely worth their while, so they'll flog them off.