Abolish Ground Rent for Existing Residential Leasehold Properties

We ask the Government to abolish ground rent for all existing residential leasehold properties in England and Wales. Ground rent is an outdated and, we believe, unfair charge that provides no service or benefit to leaseholders.

Millions of homeowners continue to pay ground rent, often under clauses that increase every 10 to 25 years, making homes harder to sell, re-mortgage, or mortgage. Although it has been abolished for most new leases, existing leaseholders remain liable, creating an unequal system where similar homeowners are treated differently solely based on when their lease began.

We believe ending ground rent could remove an unjust financial burden, improve market fairness, and support a fairer, more transparent home ownership system.

This government is determined to succeed where its predecessors failed and reform existing ground rents. In its manifesto, the government committed itself to tackling “unregulated and unaffordable ground rent charges.” We will honour this commitment through provisions in the draft Commonhold and Leasehold Reform Bill that cap ground rent at £250 per year, before changing to a peppercorn after 40 years.

This measure will apply to most long residential leases not already covered by existing legislation. It will directly address cost of living pressures for existing leaseholders, and issues with buying, selling and mortgaging properties with high ground rents. By making it easier for leaseholders to take ownership of their buildings, with conversions to commonhold made both cheaper and simpler, it is also integral to delivering on the government’s manifesto commitment to “finally bring the feudal leasehold system to an end.”

There are approximately 3.8 million leasehold properties with a ground rent obligation across England and Wales. We estimate around 770,000 to 900,000 leaseholders pay over £250 per year. In total, last year alone we estimate that leaseholders paid over £600m in ground rents. As a result of the proposed measures in the draft Bill, we estimate that leaseholders will save a total of between £10 and 12.7 billion.

The government will not be increasing anyone’s ground rent as a result of this measure. If your lease has a ground rent under £250 you will only pay that amount. Your ground rent may still increase under the terms of your lease, but it cannot be more than £250. The £250 will not increase over time.