Pricing Ground Rents
Most ground rent valuations are based on the amount of income that a block is producing. There are regional differences on price particularly if the leases are under 90 years. We are very happy to provide you with a free valuation on any ground rents that you may have.
When considering the value of your ground rents we must taken into account the amount of ground rent paid and how often the ground rents increase. Another important factor is who is responsible for the management and insurgence of the block. A block where the landlord manages and insures will be more attractive.
Another very important point that is sometimes overlooked by solicitors when drafting leases is the length of the leases. Leases of 99 years and 125 years are much more valuable that blocks with 999 year leases. 999 year leases have a very limited value so try to avoid these where possible.
Higher Ground Rent Values In London
A different valuation would be applied if the flat leases were under 90 years particularly of they were in London. The valuation would certainly be higher because the leases are creeping closer to 80 years and the freeholder would only have to wait ten years before the lessees would need lease extensions. You would not expect to pay any more for a 90 year lease if they were outside of London unless they were flats of significant value.
Coastal Areas Ground Rent Values
The prices paid for ground rents on the coast are very different particularly if the leases are under 80 years. They are certainly worth considerably less than a comparable block in London. The reason for this is that the flats do not change hands that often and therefore the landlord has much less chance in benefiting from a lease extension. Coupled with the fact that prices for flats in coastal areas are generally low and this makes all of the difference.
Help & Advice
DIf you are looking for a free valuation and are considering a sale of your ground rents we would be pleased to advise you on their possible value. Please get in touch with via our contact form below.