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Changes to ground rent for leaseholders

Updated: Sep 19, 2023


The Leasehold Reform (Ground Rent) Act 2022 will make home ownership fairer and more transparent for millions of future leaseholders.


From 30 June 2022, leaseholders will no longer have to pay ground rents for most new long residential leasehold properties in England and Wales.


A ground rent is a charge that is paid by owners of residential long leases to their landlord. Leases exceeding 21 years will often require a leaseholder to pay an annual ground rent.


However, the new rules now require a ‘peppercorn’ limit to be applied to most leases granted on or after 30 June 2022. This effectively sets the rate to zero.


Landlords will also not be able to charge administration fees for collecting a peppercorn rent. Doing so will result in a fine between £500 to £30,000.


The reputation of the leasehold system has been damaged by unfair practices, meaning that leaseholders have had to pay very high ground rents, and have received very little commitment from their landlord.


The Act will prevent this from happening in future, as it tackles ambiguity in the law, and unfairness for future leaseholders.


If you are about to sign a long lease and need advice, contact our conveyancing team at Kingswell Watts on 01924 461 236, or email enquiries@kingswellwatts.co.uk.



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