What is ground net?

You pay it when you are leaseholder

You pay leasehold ground rent when you are leaseholder. That means that you are not fully in charge of property and that you are owner of it only during contract time period. Once when contract is over you don’t have to pay leasehold ground rent anymore. You pay ground rent to the freeholder or to the landlord.

It is specified how much you pay and when

Before agreement freeholder should specify how much rent is going to be as well as method of payment. Ground net is usually very low, so called peppercorn price. Also there are many methods of payment but most common is on year basis. Other methods could be per half of year and by quarter.

If landholder doesn’t ask for rent you don’t have to pay it

It is very interesting that if landholder doesn’t officially ask leaseholder for annual or any other rent, leaseholder doesn’t have to pay it. This is very often the case because rents are pretty low. The most common price is around 50 pounds per year, but after leasehold scandal it goes up to 400 pounds, and eventually more.

There are two types of ground rent

There are two different types of leasehold ground net. Once is fixed, second one is escalating. Fixed ground net, like its name says is not able to change during contract time period. It is recommended of course to choose this variant of paying, but you cannot choose always. In other hand escalating rent is gradually rising during time. There are many ways to determine how it is going to rise. The freshest example is leasehold scandal. Leaseholders are forced to pay doubling rent, the rent is doubling every 10 years.