We have a leasehold property where the lease has just over 80 years unexpired. We have requested an extension from the freeholder, who has come back with an offer. The premium is about 25% higher than our valuer suggested we start negotiating at but the main issue is the ground rent, where they want £250pa with an increase every 15 years linked to RPI.
We are getting conflicting advice - our valuer says that there is a chance that even an RPI linked ground rent could make the flat un-mortgageable or unsellable given the noises coming from Government. He recommends going the statutory route where we will end up paying a peppercorn. On the other hand, our lawyer says that the recent Law Society guidelines only focus on agreements where the rent doubles every so often. He says the legal and professional costs of the Section 42 process are higher.
I need to be very cognisant of falling outside of lending guidance because the ownership structure of the flat severely limits the number of lenders as it is.
Does anyone else have recent experience with this?