Retirement house builders are to be exempt from the government’s elastic proposals to reduce ground rents to £10.
This is a triumph for the lobbying efforts of the retirement house builders.
“Unlike most parts of the leasehold market, where leaseholders do not gain any tangible benefit from paying ground rent, it is clear that they do in the retirement sector,” said the DHCLG today.
“Communal facilities are an important part of specialist housing such as retirement homes and ground rents support their provision.”
LKP would say that there is absolutely no relationship between the communal facilities and ground rent. Ground rent is for no defined service whatsoever.
“That’s why we are proposing to exempt retirement developments from nominal ground rents, subject to fulfilment of certain conditions.
“We are proposing to exempt retirement developments from ground rents, subject to:
“A potential buyer having the choice to either pay a higher sale price at a ground rent of £10 per annum or a lower sale price with a specified economic ground rent.
“An explanation of what the higher price or ground rent pays for and how the ground rent is reviewed; no charge or fee being made for exercising an option; independent legal advice being provided on the choice available to them; and a redress or complaint mechanism being in place.”