Funding For Ground Rents

Unless you are trying to fund a large portfolio of ground rents that you own already raising funding can be quite traumatic. It is also true that unless you are an experienced ground rent investor will struggle to get a bank to invest in you as a company. Funding is available to institutional investors for large ground rent portfolios but at the time of writing this the terms are no particularly favorable.

There no point in trying t arrange a loan on a single block as the banks will probably tell you that there is a minimum loan amount. They are not really interested in small loans on individual small blocks. It is very time consuming and you really need to go to a bank that understands freehold ground rents.

Your average high street bank will not understand the concept of ground rent investment. The banks ultimately want to know that the loan will be covered by the ground rent income so this must be taking into consideration.

Borrowing From The Bank

ground-rent-funding It is easier to arrange funding on blocks with long leases in excess of 90 years as many banks will not understand ground rent reversions under 80 years. This is why most of these transactions are completed with cash funds.

When all is sais and done it is going to be difficult to borrow money against ground ents unless you have a large number of units and the sums of money involved are significant. Unless the banks can earn a fair wack out of it they will not be interested in helping you.

Banks tend to deal with the large ground rent portfolios where the values are well in excess of one million pounds. The larger the loan the more chance you will have of borrowing the money. Large ground rent funds are able to use banks for funding as many of them are listed on the stock exchange. They are ot interested in small loans.