What are ground rents?
Ground rents are created when a long leasehold interest is granted from a freehold interest. The term ground rent refers to the amount payable annually by the long leaseholder to their superior landlord. In the early 1900’s landed estates would grant leases on their land to speculative builders, who would build houses on the fields. They would then pay annual ground rents to the freeholder. Unfortunately for the landed estates these ground rents often contained no rent review clause and lasted for 999 years, so inflation has eroded away their value. Nowadays nearly all modern apartment schemes or 1980’s flat conversions have freehold ground rents.
