Breakthrough as agent sells apartments without ground rents

A London estate agency says a new scheme of apartments being launched for sale this weekend will be the first ever in London where buyers will not have to pay ground rent.

Stone Real Estate says the apartments in question are part of a 72-unit development in Stoke Newington.

Newington Gate will consist of 32 private sale apartments, 12 shared ownership and 28 affordable rent apartments. 

It is a joint venture between Hill and Anchor Hanover who will manage the shared ownership and affordable rent - the latter for over 55s only. Just over half of the new homes will be affordable.

“Not only are we delighted to be offering these homes for sale but we’re proud to be leading change in the sector and doing so without any ground rents payable by the buyer” according to Michael Stone, the agency’s founder and chief executive.

“Ground rents and their tendency to fluctuate have been a contentious topic in recent years and while the industry is considering scrapping them as a whole, we wanted to drive this change now, in order to benefit our buyers” he says.  

Earlier this week the Leasehold Solution Group, led by leasehold reform campaigner Louie Burns, issued a manifesto aimed at political parties fighting the General Election. In it, they were urged to legislate to set ground rents on all new-build flats to zero. 

Back in June the Competition and Markets Authority launched an investigation into the sale of leasehold properties - including possible mis-selling.

This follows major controversies surrounding the fairness, clarity and presentation of some leasehold contract terms including ground rents, which critics have said could lead to people being stung by costly fees over a long period or having to abide by onerous terms.

Part of the CMA investigation will look at whether people who have bought a leasehold property have been given the information they need to fully understand the obligations they are taking on - for example the requirement to pay ground rent over a certain period of time.