Check your current ground rent against mortgage lender thresholds, project how it grows under your review clause, and understand whether it could affect your ability to sell or remortgage.
Enter the details from your lease. You can find these in your lease document or ask your managing agent or solicitor.
In the UK property market, "Onerous" is a term used by mortgage lenders to describe ground rent terms that could make a property difficult to sell. While your lease is a private contract, CML (Council of Mortgage Lenders) guidelines dictate what high-street banks will accept.
Most lenders, including Barclays and Nationwide, flag ground rent exceeding 0.1% of property value as a risk. For a £300,000 flat, any rent above £300/year is statistically "onerous."
If ground rent is over £250 (£1,000 in London), your lease becomes an "Assured Tenancy" under the Housing Act 1988.
Ground rent is generally considered onerous by mortgage lenders if it exceeds 0.1% of the property value, doubles more frequently than every 20 years, or is linked to Open Market Value (OMV).
The Housing Act trap occurs when ground rent exceeds £250 (or £1,000 in London). This can technically turn a long leasehold into an assured tenancy, giving landlords more power to repossess for arrears, which makes many lenders refuse to provide a mortgage.
The 2024 Act caps ground rent at 0.1% for lease extension calculations. Further reforms currently moving through Parliament aim to cap existing ground rents at £250 per year for all leaseholders.
No, ground rent is a contractual obligation under your lease. Refusing to pay can lead to arrears and additional charges, so it is better to challenge unfair terms formally rather than withhold payment.
Yes. If you extend your lease under the statutory process, your ground rent is reduced to a peppercorn, effectively zero, for the remainder of the term.
Yes. Onerous ground rent can make a property harder to mortgage or sell, since many lenders decline or restrict lending against leases with escalating or high ground rent clauses.