To take a topical question, would you sign a 99 year lease on a house where the ground rent doubles every ten years, starting at 1,000 pounds a year? Let’s just work out what’s involved.

The tenth root of 2 is 1.07177 so an inflation rate of 7.177% is being assumed. Actual long-term inflation rates are more like 3%, so the inflation rate on the ground rent in real terms is something like 4.055%. This is a rise of about 49% every ten years.

Within 99 years there will be nine rises in the ground rent, with the last rise being 1.488 to the power nine, or 35.8, which means a ground rent in current real terms of 35,803. This could be more than your salary!

Of course, you could say by then it will be someone else’s problem. Well yes, but what do you think it will be like in a few decades trying to sell your house with a rather high ground rent?