PropertyLaw.guru Blog

Lease extension nightmares? A tool to analyse doubling ground rents!


I have put a useful excel spreadsheet on www.propertylaw.guru under Resources>Other bits and bobs! It compares the doubling with the increase that would happen if tracked to RPI assuming a 3% increase p.a.. It shows that its not so much the doubling, its when it starts, and how often it doubles! So a 25 year doubling isn't too bad, a 20 year is about twice the effect of RPI. its the 10 and 15 year doubling where it goes crazy, especially when the start date is backdated to 1961 as in the famous Coleshill flats mentioned in the Guardian last year..

I read the Law Commission's proposals just released last week with interest.  The suggested changes to procedure make much sense, but the big and impossible problem is to allow the leaseholders to pay less for lease extensions whilst at the same time somehow not penalising the landlords. How is that ever going to work - if you penalise the landlords they will have HMG in the European Court, Brexit or no Brexit as its a human rights issue. If you don't reduce the cost to tenants then HMG will have done nothing but streamline the procedure. How this pans out will be almost as interesting and unpredictable as Brexit...
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