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email: info@dreamhousebuyer.co.uk

Selling Ground Rents - We are Ground Rent Buyers

Sell ground rents to Dreamhousebuyer.

 

We are active investors in freehold ground rents. If you are considering a sale of your ground rents, then you are in the right place. We strive to provide you with the best deal at the best price when selling your ground rents. We welcome enquiries from anyone considering selling ground rents, whether you have a large portfolio or development, a small house conversion or even short or long leases.

 

We are active investors in freehold Ground Rents and we understand the market and the extensive legislation that applies to leasehold properties. Owning residential Freeholds carries the labour intensive burden of collecting small sums of ground rent and the management of common parts.

 

Buyers of Ground Rents

On acceptance of our cash offer for ground rents, lessees are only given a notice period of 2 months in which they can elect to purchase the Freehold. Lessees can only purchase the Freehold at the price you have agreed to sell, therefore either way you can achieve the price you are looking for making this is a simple method of disposal.

 

We are happy to provide you with guidance on the legislative requirements of the sale process, and what is more we will take care of the statutory notices if required.  Streamline the process, and receive a cash lump-sum for your Freehold Ground Rents.

    Enquire now

What are ground rents and how can we help?

Ground rent, sometimes known as a rentcharge, is a regular payment made by the owner of a leasehold property to the freeholder, as required under a lease. A ground rent is created when a freehold piece of land or a building is sold on a long lease or leases. The ground rent provides an income for the landowner.  A building can be either sold as a single house or divided as flats.

 

Ground rent should not be confused with Chief Rent (confusingly also known as a rentcharge) payable on some freehold property.

 

These days, the freehold and leasehold interests on most houses are unified, but many flats continue to be held leasehold. Freeholders are then typically responsible for managing communal areas and arranging buildings insurance, for which they can collect a fee and a commission respectively, boosting the income return.

 

There are also capital gains, but these vary hugely with the terms and length of the lease. Shorter leases - those with less than about 80 years left to run - trade at a discount to the value of the flat in question, because the freeholder can theoretically take over the flat when the lease eventually expires. Capital gains on shorter leases are therefore partly linked to the (unpredictable) housing market and partly to the (predictable) passage of time.

 

Longer leases fall into two camps. A few are unimaginably long - typically 999 years at issue. In such cases, the freehold is valued like a perpetual bond, with ground rent and ancillary income instead of the coupon. However most leases are issued for 125 or 100 years and gradually become ‘short' as the years pass.

 

Flat-owners find it hard to sell when their lease falls below 80 years to expiry, so most chose to extend back to 125 years, whatever the cost.

 

So what's the catch? One problem with ground rents is their susceptibility to inflation. The terms of rental growth are often archaic, with either no provision for the rent to rise or a doubling every 25 or 33 years.

 

A more fundamental problem with ground-rent investments is the lumpiness of the returns. Most of the capital return comes all at once, with the lease extension, on a timetable dictated by the tenant.

 

 

Valuation of ground rents

If you are looking for valuation of your ground rent then we will be happy to confirm our cash offer to purchase your ground rent, whether it be a single ground rent or portfolio, we have substantial cash funds to increase the size of our ground rent portfolio. We are ground rent buyers, and have a huge appetite to help those who are selling ground rents. When selling ground rents, please consider the following in your valuation;

The value of the freehold interest comprises:

• A multiple of the current annual ground rent payable, which will depend on

  • the outstanding term of the lease
  • any future scheduled increases in the level of ground rent
  • market interest rates
  • the probability of default
  • if the rents for individual flats etc. are small, the cost of collection

• The net present value of the reversion, i.e. at the end of the lease the freeholder (to whom the rent is paid) will probably be fully entitled to the property, so the shorter the lease the greater the reversion value.
• Any attributable "marriage value" (a substantial sum designed to compensate freeholders for their loss of interest when a lease with less than 80 years to run is extended).

 

Contact us today for a fast cash offer for your freehold ground rents:
08001577497 or info@dreamhousebuyer.co.uk

 

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