Maximum Ground Rent (as % of Property Value/Purchase Price)

Our standard acceptability

Fixed Amount (Not percentage based)

Criteria definition:

Indicates if we have a maximum threshold, and if so what it is, that the ground rent on a leasehold property cannot exceed measured against the property value on Buy to Let applications. For example, Applicant 'A' is purchasing a leasehold flat valued at £100,000 that has a ground rent payable annually of £100. This ground rent equates to 0.1% of the property value. Lender 'A' has no maximum threshold on ground rents and therefor Applicant 'A' is able to proceed with a mortgage application on this property.

Policy Notes:

Family Building Society will not consider properties where the ground rent exceeds £250 outside Greater London or £1,000 inside Greater London.

Warning Notes:

We request that the legal representative reports to us if either:
(a) the lease contains an escalating ground rent clause resulting in the rent payable at any time during the term being either unfair or unreasonable;
or (b) at any time during the term the ground rent will exceed the statutory threshold set out in paragraph 3A of Schedule 1 of the Housing Act 1988.

Criteria categories:

• Property

Last updated:

09 September 2021