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Escalating ground rent scandals in flats



Would you believe me if I told you the stunning new apartment you bought last year could be virtually unsaleable in a few years time?


This is the reality facing an increasing number of flat owners being held to ransom due to the escalating ground rents set out in some leases.


A “lease” is a legal term used in property law to describe a particular type of written agreement between two or more parties recording the terms agreed between those parties.


As the flat forms part of a block built on land owned by a freeholder, the leaseholder pays an annual “ground rent” under the lease as compensation to the freeholder for use of the land.


The amount of ground rent to be paid, the review date and method of review (fixed or formula), the period covered (yearly in advance, quarterly etc.) will be set out in the lease.


Recently, it has emerged that some very well known developers are selling leasehold flats with lease clauses allowing ground rents to rise dramatically in later years.


For example, there are developments sold with 250 years leases where ground rents start at £450 doubling every 10 years. This may seem reasonable for someone buying at the start of the lease, but in practice the ground rents would be:


·         £900 by year 10;

·         £1,800 by year 20;

·         £3.7 billion by the end of the lease term


If the development contains 23 flats on the same lease terms, the freeholder would be entitled to collect over £85billion in ground rents alone! This would be in addition to service charges payable under the lease making these properties virtually unmarketable and unsaleable.


This practice must be highlighted and resolved. The ground rent scandal is a ticking time bomb which, if left to continue, could cause further destruction to the UK housing markets. 

Health Warning:

The Lease is King – READ IT!



Yashmin Mistry is Partner and Property Practice Group Leader at JPC Law.

For further information on this case or advice on leasehold law please contact her:


T: 020 644 7294

General Enquiries:


T: 020 7625 4424


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