Now City blue chips cash in on rip-off ground rents
Some of the biggest names in the city are are cashing in on rip-off leasehold deals. Blue-chip investment firms Schroders, Old Mutual and Investec are just a few of the big-name backers of Ground Rents Income Fund (GRIF) that make money from buying up ground rent fees for houses and blocks of flats.
The Daily Mail today scrutinises the investors in the Ground Rents Income Fund plc.
It finds that blue chip firms such as Schroders, Old Mutual and Investec are among them.
LKP is quoted saying that ground rents are “parasitism in its worst form’, adding:
“It’s a great way to hitch a ride on the UK residential property market. It’s a way of disadvantaging the young and is a generational wealth erosion for them.”
Schroders said: ‘We are aware that 4 per cent of the total ground rent income is derived from doubler assets. We have been and continue to engage with management on these specific assets.’
Old Mutual did not want to comment.
The ground rent fund was set up in 2012 and claims that most of its portfolio is invested in ground rents that increase in line with the retail prices index, but 18pc of its property is attributed to doubling ground rents.
It made profits of £20.2million in 2016, up from £12.5million the year before. It has £125.7million of assets, according to its most recent annual report, largely from investment in ground rents.
Earlier this month James Agar, alternative investment fund manager to GRIF, said: ‘We welcome the Government’s consultation. We will submit our own response to the consultation, which will be available to view on our website.’
He added: ‘We are committed to being a socially responsible landlord, working hard to treat all leaseholders in a simple, honest and transparent manner.’
LKP has expressed the wish that Mr Agar and his fund become “socially responsible ex-landlords” in the near future.
LKP says:
“There is in the business model of ground rent investment that would be unfamiliar to an 18th-century landed gentleman.
“It is not wealth creation or imaginative business. It is parasitism that our legislators have shamefully failed to stamp out.”
Related posts:
Ground Rents Income Fund plc says it wants to be a ‘socially responsible landlord’. How about: socially responsible ex-landlord?
Will Astor ‘tried to nobble reform of ground rents’, Daily Mail claims
Daily Mail on leasehold houses and doubling ground rent scandals
Leasehold houses to be outlawed, says the Daily Mail
Daily Mail ‘reveals’ Will Astor’s ‘links to leasehold rip-offs’
Countryside Properties plc deal to buy back freeholds turns spotlight on Taylor Wimpey, BBC told
The Muslim idea that the proportion of the dividend attributable to the onerous leases should be donated to charity seems logical in these circumstances
RELIGION , the last refuge of a SCOUNDREL! You fool Stephen…..how familiar are you with the Muslim doctrine????? P
Under Sharia law an investment fund may wish to invest in supermarkets . However they would have an issue over the sale of alchaol . Therefore they invest in a supermarket but the proportion of any dividends received is donated to charity
The amount of the dividend paid to charity is based on a proportion of profits from alchaol sales to profits from total sales
All I am suggesting is that this funds receiving income from clearly onerous rents should pay a proportion of the dividend to charity
It is an idea that seems to have merit – it is not a commentary on the Muslim faith
Yeah, if you say so – ‘Stephen’ Stephanie ‘ or ‘Other”. Is there an equivalent in the Jewish faith? I mean , let’s face it Jews and muslims are from the same tribe..
Dear Kim,
Some of your comments are vituperative, and it has been suggested that the above comment may be racist.
It isn’t in our view, but this is not the place to discuss the moral systems of the founding religions of civilisations.
Please correspond with each other with some politeness. We are extremely reluctant to remove readers’ comments on this site, but will do so if we feel it is necessary.
Additionally, you would be more effective – and make a better contribution to the cause of leaseholders – if you were disciplined and temperate in your comments.
Leaseholders behaving intemperately suits monetising freeholders and their professional advisers just fine. Ergo, act the opposite.
Regards,
Sebastian O’Kelly
Trustee
Dear Sebastian
As the daughter of a Jewish Mother and an African Muslim father but is an atheist – my comment was not meant to be in the slightest bit racist and I am most relieved that LKP has taken that view. However, I entirely take on board that I can be a bit harsh and sarcastic ‘ sometimes.- I will desist. I cannot imagine who would think my comment racist but there you go. I will not be in the slightest bit offended if you wish to remove it as it really didn’t add anything to the debate.
Regards
Kim