Mark Adcock
“About 50 years ago, my late father and I started investing in freehold and leasehold ground rents to provide an income stream for both him myself and my children. Over the years we increased the portfolio significantly until it reached about 2,500 properties. Allowing for disposals and adjustments to the portfolio, the group of companies which I now manage own about 1000 ground rents and rent charges on properties secured throughout the UK. The average ground rental income is £14.00 per property. Nothing like the amounts of ground rents which have been in the news.
The greater majority are secured on 999-year leases around the UK with only a small reversionary portion. At the moment only a handful of ground rents exceed £250.00 per year. However, the ground rents were purchased all those years ago with the expectation that the income would increase at least in line with inflation. If the cap of £250.00 per annum is enforced, we will lose money and my personal income and the potential for my children's income will decrease.
Worse, if the 40 years sunset provision comes in, there will be no income for my children in their retirement. I have asked my MP to push for a continuing increase at least equal to RPI if the sunset clause becomes law.
All the changes which are proposed which have a detrimental effect on freeholders will have a devastating effect on my income and more particularly the income of my children and their children.
It simply is not right for a government to legislate for contractual rights. Leaseholders who entered into bad agreements have no greater political or moral case to have those contracts put right than we have as freeholders to protect income for myself and future generations of this family. The same applies to the change in the law calculating how a premium to extend the lease is calculated. Why should we see a significant drop in the investment portfolio, simply because, there is a political climatic change? None of this is our fault and we have treated our leaseholders with respect and humility throughout the time we have owned and managed the ground rent portfolio.
I finish with a phrase which horrifies me, and which constantly appears on the lips of both MP’s and others. They say that ground rent is a scam and that there is nothing received in return by leaseholders! Even if that was right, it is not exactly the same for any rented property? Freeholders of flats, in particular, carry a high risk in not only owning the building but also managing it amongst other things. I have numerous examples of having to fight off utility suppliers trying to pin on me claims for unpaid services as a freeholder. Who pays for all that work? The phrase simply serves a political purpose and has no value in reality and represents, in my view, much of what has happened here to politicise a problem affecting a small minority of homeowners in the UK.”