Is £250 ground rent increase an issue?

you could always approach the landlord and agree a variation to reduce the ground rent and pay so to do. Some lenders less enthusiastic but it depends on the overall value of the flat

Government policy toward ground rents is that they serve little purpose other than to line the pocket of the freeholder. It is highly likely within a few years ground rents will no longer be in existence. Keep and eye on Michael Gove and ground rents.

The Leasehold Reform Bill currently before Parliament is looking to reduce GR to a
" peppercorn" ( nil) or capping them to a level substantially less than £250. If it becomes law- which it will- then escalating GRs will be a thing of the past. Hang fire.See what happens.

Be aware, the bit about capping GR - possibly even with a zero cap - applies to houses (if it gets enacted)
There might be something for NEW leasehold flats in the bill.
There might - but probably will NOT be anything for existing flats....

It all depends on the ground rent increase provision within your lease. Perhaps you can tell us what this is please ?
Ground rents doubling say every 10 years are likely to be an issue for a lender. Many recent leases make a ground rent provision linked to inflation usually RPI. One of my leases is RPI linked but the review period is every 15 years so not too bad. Was £250 p.a. and earlier this year increased to £424 p.a. but it will stay at that level for another 15 years when it is reviewed again. Lenders as far as I am aware don’t have an issue with RPI linked leases.
In your case whether £250 p.a. is an issue for a lender it depends on the terms within your lease.

Reply to the comment left by Mr Blueberry at 29/11/2023 - 09:51
I am not so sure you are right. Although Gove has been swayed by the argument that there is nothing received in return for the ground rent it may yet be Parliaments decision (and rightly in my view) that a sum in ground rent was part of the bargain for the property and hence some rent may stay and to the extent it is not payable people will have to pay something to be rid of it in the same way as they do in a lease extension. The Bill is like any negotiation. The opening position is not necessarily where he expects the final position to end up

In my experience is is a problem on several counts. Anything over £250 and if it also has the potential to rise above that, creates an assured tenancy status and enhances a superior landlord's rights to take back the property should a breach of the lease occur. For example not paying three payments of ground rent would give the superior landlord an automatic right to the property back. That figure of £250 and rising is also a cutoff for lenders. The building where I have an apartment is now unmortgageable owing to this. The third consequence is that an unmortgageable property results in a property that cannot be sold to the full range of buyers. As only cash investors can buy, the prices are kept low. In my block, properties that sold in 2006 for £135,000 now only achieve £60,000- if the owner is lucky, and the sales don't happen overnight. The result is then a building that comprises all renters - transient groups with no interest, financial or otherwise in their surroundings. With no owner occupiers, but plenty of absentee landlords, any meetings the management company might agree to are usually pointless with the result the Services Charges are through the roof and there is no accountability. Most landlords in my block are only just covering Service Charges and Ground Rent from the rental income- they are certainly not making any profit. If finance costs were factored in it would be a negative equity situation. The deed of variation is an idea to explore but the easiest thing is to steer clear.

A ground rent of £250 p.a. may not be excessively high if the property is a two bed apartment in central London worth £2 million. In fact it would be insignificant and I very much doubt a lender would have an issue with it.
It all depends on the property and the rent increase terms within the lease.
In your own particular case where your £250 p.a. ground rent makes your property pretty much worthless what are the terms for ground rent reviews within your lease can you enlighten us please ?

Reply to the comment left by Shining Wit at 29/11/2023 - 10:02
You are not correct. New build houses were dealt with last year. The current consultation is aimed primarily at the existing 4.5m leaseholders, most of which are flats. It is highly likely the ground rent regime will be changed, but no timescale. The good news is Labour said it would abolish leasehold... but that was Rayner speaking from her backs*** as usual. If you want to understand all the issues surrounding leasehold, sign up to #NationalLeaseholdCampaign.
Meanwhile, don't request a DoV from your freeholder. Ask yourself, why would they give you one... unless they can see the direction of travel, and want to rake in as much undeserved cash as possible before the guillotine drops.

In my case the rent reviews are every 10 years and the next is due in 2025. There is a formula but it is so complicated, predicting what the cost will be is impossible. Just had a yet another Section 20b notice - last year's was a £37,000 overspend on the budget and this year's indicates a £50,000 overspend. The building has not even had a cladding problem potentially adding to the costs.
I just think the OP needs to think carefully about the age of the building the effects of this on the SC, the terms of the lease, any contribution to the sinking fund on exit and of course the overall impact of the GR - the original focus of the question.