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Onerous Ground Rent for Residential Property - Your Options

What is Ground Rent?

Ground rent is a payment due to the “freehold” owner of the land that a “leasehold” property is on. It will be more familiar to people who own flats but historically has been far less common with houses, which are usually owned completely on a “freehold” basis.

Onerous Charges

Historically, ground rent has commonly been a relatively modest sum increasing, if at all, only in line with inflation. However, over recent years many purchasers of new build residential flats and houses have been very surprised belatedly to discover onerous clauses deep within their leases where the amount of ground rent considerably increases over time, often doubling every few years. The problem clauses have also been identified in some lease extensions offered by landlords of existing property.

So a charge that might initially appear relatively modest at the time of purchase can, over time, become crippling. We have seen examples of leases where the rent becomes truly eye watering. This scandal has been making the headlines for some time and is something that anyone who has purchased a considering buying a new build property, or who has recently bought one, should be aware of.


Onerous ground rent clauses can cause many problems with the property including:

  1. Affordability - the amounts payable under such clauses can quickly become very real sums of money, giving rise to an unexpected cost that has not been budgeted for and over time becoming completely unaffordable. There is an added risk that an unpaid landlord can take the property back by “forfeiting” the lease.

  2. Getting mortgage finance – Many finance providers are very live to the problem and have a strict policy of not lending on a property with such onerous clauses. You could therefore find it difficult to remortgage the property when your present mortgage rate deal expires.

  3. Selling the property – Potential buyers are put off by the existence of these types of clauses, causing problems if you try to sell the property. In some extreme cases we have seen, the property is not only worthless but the owner is also faced with substantial additional liabilities.

What Can You Do?

You could seek to resolve the matter with the landlord. Clearly this is more difficult once you have purchased the property, but your landlord might be open to you:

(i) buying the freehold; or

(ii) renegotiating the terms of the lease.

You may also be able to force this under certain legislation, although that can be complex and expensive.

Some landlords may be keener to help, particularly well-known developers wishing to avoid negative publicity. For example, one national developer, Taylor Wimpey, has set up a £130m redress scheme in response to the scandal. Others may follow suit. However, it might not be simple, particularly if the developer has sold the lease on to a specialist ground rent landlord. The government has said that it intends to ban such clauses, but this is unlikely to help those already saddled with the problem.

Professional Negligence

Often these onerous clauses are deep within the small print of contracts, something unlikely to be picked up by a lay person. Purchasers are therefore reliant on their conveyancing solicitors to identify and carefully highlight these onerous clauses, so they can make informed decisions about how, and whether, to proceed with the purchase. Sadly, many slipped the net. If your conveyancing solicitor didn’t point out the clause and sufficiently advise you about it, then you might well have grounds for a professional negligence claim. Valuing such claims can be complex, particularly where the onerous obligations often only kick in decades or more in the future. However, it is important that once such clauses are suspected that early advice is sough, particularly as options can quickly be lost as time passes.

We have the expertise and valuation expert contacts to ensure proper redress. If you think you might be affected, please don’t hesitate to contact Sarah Holland personally for a no obligation discussion on 0117 959 5438 or at sholland@loneystewartholland.co.uk.