Skipton Ground Rent Update: Selling or Remortgaging

Instruction update: 8 October 2026. Applies to Skipton Building Society’s England and Wales Part 2 answer at section 5.14.9a. Lender instructions can change. Conveyancers should check the current Handbook and the particular mortgage offer before relying on this summary.

Skipton Building Society’s updated ground rent wording matters to anyone selling a leasehold property to a buyer using Skipton, or remortgaging with the Society. It sets out acceptable ground rent arrangements, identifies unacceptable review mechanisms and requires a deed of variation where the ground rent provisions do not meet its criteria.

For homeowners, the practical question is whether the lease will satisfy the proposed lender. For conveyancers, it is whether the annual rent, review clause and future increases have been checked against the complete instructions.

What does Skipton’s 8 October 2026 wording say?

The answer appears at section 5.14.9a, headed “If different from 1.11, contact point for matters connected with the lease”. The stated contact is the Completions Team via LMS Secure Link. The answer also contains substantive guidance under the heading “Ground rent & event fees”.

Skipton says lease terms such as ground rents must remain reasonable throughout the lease term and meet its stated requirements. Where potentially onerous terms concern ground rent, the conveyancer is asked to provide:

• The current annual ground rent.
• How often it is reviewed.
• The mechanism used to calculate any increase.

Arrangements listed as acceptable

• Ground rent less than or equal to 0.2% of the current property value.
• Leases granted after 30 June 2022 limited to a peppercorn ground rent.
• Ground rent escalations linked to the Retail Price Index (RPI) or a similar index.
• Ground rent doubling every 20 years or over a longer period, provided it does not continue to double after 125 years.

These points must be read together where applicable. A low current rent does not, by itself, make an unacceptable review mechanism acceptable. The peppercorn point above records Skipton’s instruction; it should not be treated as a complete description of the statutory rules and exceptions for new leases.

Arrangements listed as unacceptable

• Compounded RPI increases.
• Reviews linked to the capital value of the property or the building containing it.

Skipton’s wording states that ground rents which do not meet the criteria are unacceptable and that a deed of variation should be obtained to amend the provisions so they meet the criteria.

What does the 0.2% ground rent threshold mean?

For a property currently worth £250,000, 0.2% is £500 a year. A current annual ground rent of £450 would fall below that numerical threshold. That calculation does not settle whether the lease satisfies Skipton’s other requirements.

The review clause still matters. If the rent doubles every ten years, for example, that does not fall within the stated acceptable category of doubling every twenty years or longer. Likewise, an RPI label does not answer whether the clause involves the compounded increases Skipton excludes.

Conveyancers should examine the actual formula, review dates and any amendments to the lease. Where the mechanism or the application of the 125-year limitation is unclear, seek clarification rather than assuming the clause qualifies.

Why this matters when selling or remortgaging

A ground rent clause can affect a transaction before the next increase takes effect. A buyer’s conveyancer must assess the lease against the buyer’s lender requirements, including its future review provisions. On a remortgage, the proposed lender’s requirements need to be considered again.

A useful illustration appears in a 2019 MoneySavingExpert discussion about a failed leasehold sale. The owner reported a £175 annual ground rent doubling every fifteen years, with the next doubling not due until 2030. They said their sale had fallen through because the buyer’s lender queried the clause and the freeholder would not agree to a deed of variation.

This was a homeowner’s account, not a court finding or a verified account of Skipton’s lending decisions. It illustrates the seller impact: a future increase can become a present obstacle, even where the owner expects to move before paying it.

Does indemnity insurance solve the problem?

The wording dated 8 October 2026 supplied for this update specifies a deed of variation where the ground rent criteria are not met. It does not state that indemnity insurance is an alternative for those non-compliant provisions.

Conveyancers should therefore not assume that an insurance policy will satisfy this instruction. Insurance does not amend the rent or review mechanism. Any proposed alternative requires an express lender decision through the appropriate reporting route.

For sellers, the next step is to establish precisely which provision needs changing, whether the landlord will agree and what costs and timescale are involved. A proposed variation should be checked against the lender’s requirements before it is completed.

What should conveyancers record on the file?

• The current ground rent and the property value used for the percentage calculation.
• The review frequency, formula and next review date.
• Any doubling provisions and when they cease.
• The relevant lease and any existing deeds of variation.
• The applicable Handbook instructions, mortgage offer conditions and any written lender response.
• The explanation given to the client about future rent, resale and remortgage implications.

The heading refers to event fees as well as ground rent. The detailed criteria reproduced here concern ground rent and should not be treated as a complete acceptance test for every event fee.

What if the ground rent was not explained when you bought?

A problem emerging now does not establish that the original conveyancer was negligent. The original lease, report on title, lender instructions and any lender consent need to be examined in their historical context.

As our article on historical ground rent mortgage requirements explains, today’s instructions cannot establish what a lender required years earlier. Dated instructions can help assess compliance in an audit or professional indemnity investigation, alongside the wider purchase file and the advice actually given.