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About stepic

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  1. Actually, I think I worked it out wrong. £250 per week doubling every 20 years for 125 years, would be doubling six times. So this would b: 0-20 £250 21-40 £500 41-60 - £1000 61-80 - £2000 81-100 - £4000 101- 120 - £8000 121+ £16000 Is that correct? And if so, what figure would £16k be @ 2.5% inflation? Anyone with any assistance in this area - all help would be appreciated!
  2. If inflation averages 2.5% for 123 years the value of £8000 in 123 yrs time would be Around £350, so not particularly an issue... just wondering whether it's better to pay the smaller amount rather than go back and fight the original offer and incur legal costs which may wind up being more than the second offer. My primary concern isn't so much £x per year ground rent but also rather the affect on resale value.
  3. Hi all I was just hoping for some help with this. I bought a property for £235k 2 years ago. There is a ground rent accumulator within the lease that starts at £250 per year and doubles every 10 years until the 50th anniversary, so in other words in 50 years the ground rent will be £8k per year. The lease is 125 years, so 123 years to go at present. Obviously I would like to remove this ridiculous clause. I have requested a valuation from the freeholder to extend my lease by 90 years and thereby reduce the ground rent to a peppercorn. They have quoted £22,950 + £845 legal costs + £575 valuation and processing fee, so £24,370 in total. I was hoping to get some advice in terms of - is this an accurate figure? And if not, what can I do - should I write them back a letter and try and agree a lower fee? If so, what kind of fee should I be asking for? I would ideally prefer to avoid the legal route as I figure that will just create more costs, but I guess I kind of want to know how inflated this figure is, as I'm sure they're trying to push their luck. They also offered the following deal: A premium of £15,950.00 (Fifteen Thousand Nine Hundred and Fifty Pounds) Exclusive of our legal costs of £845.00 (+ VAT if applicable) Exclusive of valuation and processing fees of £575.00 A new ground rent of £250.00 per annum to increase every 20 years by the higher of the increase in the Retail Price Index or twice the current ground rent as at the month immediately preceding each rent review period This still ends up being £8k per year after 120 years, but due to inflation this is obviously less onerous than the current accumulator. Any advice would be gratefully appreciated, particularly whether I should negotiate down on the original offer, or take up the second offer. I am particularly interested in whether the 2nd offer would affect future resale value? Many thanks
  4. Ed999, I have been advised (by an independent party, not TW) that once I have owned the flat for 2 yrs I can claim a statutory lease extension where the term increases by 90 yrs but more importantly the rent falls to a peppercorn. A lease for 125 yrs where the ground rent that doubles every 10 years for the first 50 yrs with a flat worth £235k would cost around £15k plus the landlords legal and valuation fees. As time passes the cost rises After 2 yrs £15k (ie as above) After 5 yrs £17.3k After 10 yrs £22.7k The worry is that after 8 yrs the ground rent increase to £500 is just 2 yrs away and only 12yrs from becoming £1,000. This could, as you say, have serious consequences on its resale value particularly if inflation is less than 7% per annum. Trying to organise a collective purchase of the freehold, as you suggest, may save some legal costs but there would be no savings as the formula is the same. To get 40 people to raise £15k each in these troubled times would be nigh on impossible... If I can get the £17.5k together within 5 years, and reduce ground rent to a peppercorn, then this solves the issue does it not?
  5. In my limited knowledge I would have thought the fact the ground rent caps at £8k between years 50-120 (that is, 70 years!) would seem quite favourable more than anything. It must be a complex calcuation indeed trying to calculate a ground rent going 100+ years into the future...
  6. i'll be honest when I say I don't know too much about enfranchisement but is the statutory purchase price of the freehold based on, amongst other things, the current ground rent or the proposed future ground rent also?
  7. What if we don't intend purchasing the freehold? Put it this way, in the year 2040 the ground rent pa will only be £1,000. That's 29 years from now. I'd like to see what other ground rents will be like in 29 years because I'm sure they'll be more than £1,000. Are your fears purely based on the freehold element? Is a ground rent of £1,000 in 29 years or £2,000 in 39 years going to be severe enough to affect the value of freehold? These figures just don't alarm me at all. How much was the value of property 29 years ago? How much was a Big Mac? I'm interested in your views howeever as I'm about to commit to a significant amount of money, but I'm just trying to make an informed decision - to sort out the rational argument between panic / fearmongering and being naive and blase.
  8. I am also looking at buying into this East Croydon development. I was initally taken aback by the ground rent clause but frankly I think you are all perhaps being a little alarmist about it. Yes it will cost £80,000 for the 10 year period between years 50-60, and every 10 years after that, but are we not forgetting this is in 50 YEARS?! Rent doubling every 10 years equates to approx 7.18% per annum, so whilst being ahead of inflation I wouldn't say it was 'astronomical' given it wasn't so long ago savings rates were around that for term bonds etc. Furthermore this clause is in every one of Taylor Wimpey's contracts, so we're talking about thousands of people being affected by this. If, in 20 years time, it somehow becomes unmanagable, there's going to be an army of people ready to take action, and then then TW will have to deal with it or face a PR disaster. I've seen people querying this clause on message boards going back to 2007, yet it evidently hasn't affected sales for TW. I think people are being alarmed by the £80,000 figure without taking inflation, the time scale involved, and just how much the property value/tenant rents/etc will be in the year 2061! I really don't feel I'm being naive about this.
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