27th January 2026
What is ground rent?
Ground rent is the fee paid by the leasehold homeowner for the land beneath their building.
It must be paid under their lease, and the amount can double after a certain number of years making it hard to sell or get a mortgage for a property.
Ground rent was abolished in 2022 for most new residential leasehold properties, however stayed for existing lease hold properties.
How is it changing?
Leaseholders across England and Wales are set to benefit from a major change of the outdated leasehold system – with ground rents set to be capped at £250 a year, changing to a peppercorn cap after 40 years, this will mark the end of residential leaseholders paying over the top for their ground rent.
This move will ensure leaseholders keep more of their hard-earned cash, with many seeing savings of over £4,000 over the course of their lease, improving cost of living for millions. This will also unlock house sales for leaseholders whose lives have been put on hold because of ground rent terms that make their homes hard to sell.
New leasehold flats will also be banned and homeownership strengthened.
The bill will now be reviewed by the Housing Committee before making its way through to Parliament, with the cap hopefully coming into force in late 2028. – as per the BBC 27th January 2026.