Some of the biggest names in the city are are cashing in on rip-off leasehold deals. Blue-chip investment firms Schroders, Old Mutual and Investec are just a few of the big-name backers of Ground Rents Income Fund (GRIF) that make money from buying up ground rent fees for houses and blocks of flats.
It finds that blue chip firms such as Schroders, Old Mutual and Investec are among them.
LKP is quoted saying that ground rents are “parasitism in its worst form’, adding:
“It’s a great way to hitch a ride on the UK residential property market. It’s a way of disadvantaging the young and is a generational wealth erosion for them.”
Schroders said: ‘We are aware that 4 per cent of the total ground rent income is derived from doubler assets. We have been and continue to engage with management on these specific assets.’
Old Mutual did not want to comment.
The ground rent fund was set up in 2012 and claims that most of its portfolio is invested in ground rents that increase in line with the retail prices index, but 18pc of its property is attributed to doubling ground rents.
It made profits of £20.2million in 2016, up from £12.5million the year before. It has £125.7million of assets, according to its most recent annual report, largely from investment in ground rents.
Earlier this month James Agar, alternative investment fund manager to GRIF, said: ‘We welcome the Government’s consultation. We will submit our own response to the consultation, which will be available to view on our website.’
He added: ‘We are committed to being a socially responsible landlord, working hard to treat all leaseholders in a simple, honest and transparent manner.’
LKP has expressed the wish that Mr Agar and his fund become “socially responsible ex-landlords” in the near future.
“There is in the business model of ground rent investment that would be unfamiliar to an 18th-century landed gentleman.
“It is not wealth creation or imaginative business. It is parasitism that our legislators have shamefully failed to stamp out.”