Ground Real Rent With Line With Rpi
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FAQ
As mentioned earlier, ground rent is paid by the long leaseholder to the freeholder for the use and development of the land. It is usually calculated as a percentage (5-10%) of the income from the land and any buildings.
RPI-linked ground rent clauses are fairly common and many people may therefore assume that they are unproblematic. However, as recent dramatic increases to the RPI have shown, RPI-linked ground rent can give rise to uncertain and potentially substantial increases in the amount being paid.
For the RPI, the price ratio for the basket each month is calculated relative to the previous January. Then the value of the index is obtained by multiplying the value of the index for the previous January by this price ratio.
As mentioned earlier, ground rent is paid by the long leaseholder to the freeholder for the use and development of the land. It is usually calculated as a percentage (5-10%) of the income from the land and any buildings.
Retail Price All Items Index (RPI) The initial ground rent is typically divided by the base figure defined in your lease and then multiplied by the review index figure. The total is your new ground rent amount.