Mortgage lenders including Barclays and Nationwide have become even stricter with their mortgage lending criteria and recently the implication of your lease agreement saying that your ‘ground rent will double’ in the next 25 years, is causing all kinds of problems for homeowners.

The clause only applies to new build properties and has affected large developers including Taylor Wimpey.

What is behind this?

In the Brexit apocalypse, mainstream lenders are being more stringent than ever and the idea of ground rent doubling or anything doubling by the matter is something that they do not want to lend against.

This is part of the ‘freeholder scandal’ where clauses have been put into place that state ground rents must double, leaving huge bills for households and something that the Government has expressed a strong interest in banning.

Banks do not want homeowners to be tied down and the idea is that once ground rent doubles, it may only be a few hundred pounds, but it continues to grow and grow and no potential buyer wants to be left with this kind of clause.

What are your options to get out of it?

Buy the freehold

This is likely to cost anywhere from £10,000 upwards per household and to include numerous people within the development. If people within the road or development do not want to pay it, they will pay their ground rent to the new owners of the freehold (their neighbours).

Get a lease extension

Likely to take up to a year and also cost up to £10,000. With a lease extension for another 99 years, these clauses become void.

Sell to a cash buyer

Cash buyers looking to downsize do not require mortgages so they will not be held back when buying this property. But it does leave this issue for the future if they want to sell it or if it goes to their children as inheritance.

Ask the freeholder to change the terms

You can ask your freeholder to change the terminology from ‘doubles’ to ‘reviews’ every 25 years. This will likely come at a cost, since the freeholder has got a good deal tying you in at the moment.

Use a specialist finance company

You can use a specialist lender to get a mortgage for this type of thing. The rates are likely to be higher than a mainstream bank like Barclays or Nationwide. You can apply for Residential bridging loans for this type of thing and the loan will be regulated because it is secure upon an individual’s primary residence – so things like credit rating will be very important in this scenario.

If you would like more information about this or would like assistance getting a mortgage under these circumstances, please contact us at