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New Ground Rent Rules under The Leasehold Reform (Ground Rent) Act 2022

Updated: Apr 14, 2023



In recent years, residential leasehold property law has been a disputed topic given rise to much tension between owners and landlords. Owners feel that there is too much control over what they can and can’t do to their own property, while also feeling that there is too little control over what landlords and management companies charge for ground rents and service charges and how that money is spent.


Due to the Leasehold Reform (Ground Rent) Act 2022, this is an area of law that has seen changes and it’s anticipated that more changes will follow. The new Act will put an end to Ground rent for new, qualifying long residential leasehold properties in England and Wales.


The Leasehold Reform (Ground Rent) Act 2022 comes into force on 30th June 2022, expect for retirement properties which won’t come into force before 1st April 2023.


Due to the act coming into force, most new leases will not legally have a ground rent of anything more than ‘one peppercorn per year’. For those regulated by the act, it means that no money can legally be charged as ground rent. It also prohibits freeholders from charging admin fees for collecting a peppercorn rent.


Even though most leases will be covered by this act, there are few exceptions. These can be found on the government guidance website below:


For any existing leaseholders who are looking to extend their lease after the commencement of this act, any extended portion will be lowered to a ‘peppercorn rent’.


Even though this change can be seen as one of the most significant changes to property law in a generation, the pace of the reform has been slow and is expected to continue that way as any changes are contentious. The different rights and priorities of landlords and tenants need to be balanced.


Future proposals have been made and are currently being discussed, please see below:


  • To forbid the use of leasehold for the sale of new houses.

  • To simplify the process of leasehold enfranchisement for those tenants looking to purchase the freehold reversion and look to make it cheaper for leaseholders by varying the way its calculated.

Going forward, the government intends to make the buying/extending leases easier and cheaper.


Contact us now to speak with one of our expert conveyancing team members and get the guidance you need.


Article by Stacey Evans, Licensed Conveyancer. Call Stacey on 01554 749144 or email stacey.e@dpalaw.co.uk.


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