The UK government has announced a draft Commonhold and Leasehold Reform Bill that includes a major change: from late 2028, ground rent for existing leaseholds in England and Wales will be capped at £250 a year. Over time after 40 years, this will reduce to a “peppercorn” (a nominal amount that is essentially zero).
What is ground rent?
Ground rent is an annual payment that leaseholders make to the freeholder, the person or company who owns the land. Unlike service charges, ground rent does not pay for any ongoing work or maintenance. Historically, some leases included escalating rents that could double every few years, making properties harder to sell or mortgage.
What’s changing?
Under the new proposals:
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Ground rent will be capped at £250 a year for most existing leaseholders from around 2028.
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After 40 years, the charge will be reduced to a peppercorn, essentially zero.
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New leasehold flats will be banned under future rules, aiming to give homeowners more control.
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The government also intends to abolish forfeiture so leaseholders won’t risk losing their home over relatively small debts.
These changes are designed to tackle what many see as “unregulated and unaffordable” ground rents that can trap homeowners in unfavorable deals.
What this means for buyers
If you’re looking to buy a leasehold home, the cap could make properties that were once hard to sell much more attractive - because lower ground rents often make it easier to secure a mortgage.
The move also brings greater clarity when comparing homes: you’ll have a clearer idea of your long-term costs from day one.
What this means for current homeowners
Existing leaseholders who currently pay high ground rents may see future savings. While you’ll still pay ground rent until the new rules take effect, the cap could mean hundreds, or even thousands, of pounds saved over time.
Even before the cap kicks in, we recommend reviewing your lease terms with a professional if ground rent is causing issues - such as limiting your ability to sell or remortgage.
How Your Move can help
At Your Move, our property experts stay on top of the latest legislation and what it means for you. If you’re buying, selling, or just want to understand how these upcoming changes could affect your home or investment, we’re here to support you with clear, friendly advice.
Talk to your local Your Move branch today for personalised guidance.
The Your Move Content Marketing Team
