No ground rent for apartment block?

[Alice1988x]

Hello, I viewed a flat the other day and was told that the service charge is £500 every six months which seems fairly standard for the area but that there is no longer going to be any ground rent payable because there has been a deed of variation. Can someone tell me what this means or rather why the freeholder will have agreed to this? Doesn’t seem to make financial sense for them?

Ground rents were usually very small amounts anyway, so no massive loss to the freeholders if reduced to zero.

Due to property developers trying to sneak in large ground rents to leaseholders in recent years, the government has got the CMA to try and stamp this out so going forward most ground rents on new builds will be zero.

This is having a ripple effect on existing properties as well as some lenders were getting funny about mortgaging properties with "doubling" clauses in the lease (where the ground rent clause oils be doubled every X years)

In short, deed of variants are changing existing leases to remove these doubling clauses, often removing the cost of ground rent entirely.

Not sure I've explained that very well, but you're ok, zero ground rent is nothing to be alarmed about.