GroundRentsWanted - Elmdon Real Estate


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Why Should I sell my Ground Rents?
Frequently Asked Questions
Should I sell my Ground Rents to the leaseholders or you?

Why should I sell my ground rents?

The reasons people decide to sell their freeholds vary, depending on both circumstance and lifestyle.

Financial Considerations

Prices are currently as high as they have ever been, and specialist investment companies are able to complete rapidly without bank funding. Often vendors wish to invest in their next development, or to wind up the company which undertook the development to avoid ongoing Companies House and accountancy costs. The monies realised from a sale will normally be treated as a capital gain if held in an individuals name, and generous annual tax-free allowances are available for this.

Other vendors might have obtained their interests as part of a probate estate, and the ongoing administrative costs of running a portfolio can eat into the funds available for the beneficiaries. In addition the sums realised from a sale can be put towards inheritance tax bills.

Administrative Considerations

The detail and amount of legislation surrounding rent and service charge collection is constantly evolving. If demands for monies owed are sent in the incorrect format, or without the necessary accompanying paperwork they are invalid – and the courts will not support attempts by the freeholder to recover the monies. As such while an obligation to insure a freehold may be incumbent on the reversionary owner, there is no reason to think the monies expended will be fully recoverable should the legislative requirements of collection not to be adhered to.

As a result some freeholders become frustrated with their holdings, and seek to sell them.

Lifestyle Considerations

To administer freeholds effectively it helps greatly if one is resident in the United Kingdom, and able to visit the property at short notice should it be required. As such individuals moving to other countries, or to other parts of the UK on retirement – may well find it impractical to continue to manage small portfolios of ground rents.

Economies of scale in ownership assist greatly in making freehold ownership a worthwhile endeavour, and those with only a few interests may well find it more ‘more hassle than its worth’.

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