Ground Rent

An annual charge paid by a leaseholder to the freeholder for the use of the land. The Leasehold Reform (Ground Rent) Act 2022 set ground rent to zero (a peppercorn) for most new residential leases granted from 30 June 2022 onwards. Existing leases may still have ground rent obligations.

The Leasehold Reform (Ground Rent) Act 2022, which came into force on 30 June 2022, prohibits landlords from charging ground rent (other than a peppercorn — effectively zero) on regulated leases for new residential dwellings in England and Wales. Retirement home leases were brought into scope from 1 April 2023. Existing leases granted before those dates are not affected and may still contain doubling ground rent or RPI-linked review clauses. Problematic ground rent clauses in existing leases can affect mortgageability: lenders often decline to lend where ground rent exceeds £250 per year (£1,000 in Greater London) or has review provisions that could lead to it doing so. The Leasehold and Freehold Reform Act 2024 gave leaseholders extended rights to reduce onerous existing ground rents when extending their lease.

Related terms

LeaseholdFreeholdService Charge (Property)

Related guides

Leasehold and Service Charge Disputes

Owning a leasehold property means owning the property for a fixed term while the freehold — the land — is owned by someone else (the freeholder or landlord). Leaseholders pay ground rent (now largely abolished for new leases) and service charges for the maintenance and management of the building. Disputes about service charges, management quality, and lease terms are common, but leaseholders have legal rights and access to the First-tier Tribunal (Property Chamber) to resolve them.

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