Ground Rent Law: What's In Force and What's Just Proposed

Ground rent, the annual payment a leaseholder makes to their freeholder simply for holding the lease, has already been reformed for new leases, but a much bigger change for existing leaseholders is still only a proposal. This guide explains what the current law actually does, and what is being proposed but is not yet enacted.

What the Leasehold Reform (Ground Rent) Act 2022 Actually Did

The Leasehold Reform (Ground Rent) Act 2022 is a short, focused Act that is fully in force. It restricts ground rent on most new long residential leases, meaning leases granted for more than 21 years in exchange for a premium (an upfront purchase price), to a peppercorn, which in legal terms means effectively zero: no money can lawfully be charged or collected as ground rent under a lease the Act covers.

The peppercorn requirement took effect on 30 June 2022 for most new qualifying leases, and was extended to retirement home leases from 1 April 2023, giving that sector a longer transition period. A landlord under a lease covered by the Act cannot lawfully demand or accept a ground rent payment above a peppercorn, and cannot charge an administration fee for collecting a restricted ground rent either. Enforcement sits with local trading standards authorities, who can issue financial penalties against a landlord who breaches the Act.

What Counts as a "New" Lease Under the Act

The Act is not retrospective. It applies based on when the lease was granted, not when you bought the property. If your lease was granted (first created) on or after the relevant commencement date, 30 June 2022 for most residential leases or 1 April 2023 for retirement homes, and meets the Act's conditions (a long lease of more than 21 years, granted in exchange for a premium), then any ground rent it specifies is capped at a peppercorn regardless of what the paperwork might otherwise have said. Buying a leasehold flat second-hand does not "reset" the lease; what matters is the date the lease itself was originally granted, not the date of your particular purchase.

If your lease was granted before these dates, the 2022 Act simply does not apply to it, and the ground rent terms in that lease continue as originally written, including any ground rent review or doubling clauses it contains.

If You're an Existing Leaseholder: What the Law Does Not Do

This is the point that causes the most confusion. The Leasehold Reform (Ground Rent) Act 2022 did nothing to reduce ground rent under leases granted before its commencement. If you hold an older lease with an escalating or "doubling" ground rent clause, or simply a ground rent you consider high, that clause remains contractually enforceable as things stand, and the 2022 Act gives you no direct right to have it reduced or converted to a peppercorn.

It is easy to see coverage of "ground rent reform" and assume it already applies to every leaseholder. It does not. The 2022 Act was always targeted at stopping new onerous ground rents being created, not at unwinding ones that already existed.

The Proposed £250 Cap for Existing Leaseholders: A Proposal, Not Law

Separate reform aimed specifically at existing leaseholders with legacy ground rents is under discussion, but it is not enacted. It appears as a provision of the draft Commonhold and Leasehold Reform Bill, published on 27 January 2026 for pre-legislative scrutiny, not as secondary legislation under the Leasehold and Freehold Reform Act 2024. As proposed, it would cap ground rent for existing leaseholders at £250 a year, falling to a peppercorn after 40 years.

Three things are worth being precise about. First, the draft bill has not been introduced to Parliament; introduction is expected in autumn 2026 at the earliest. Second, even after introduction, a bill needs to complete its parliamentary stages and receive Royal Assent before it is an Act, and then further time before any given provision is actually commenced. Third, the government's own stated timeline describes this specific reform as likely to arrive in late 2028, though the House of Commons committee that scrutinised the draft has pushed for it to be brought forward to late 2027. Until any of that happens, do not treat the £250 cap as current law, and do not assume a specific date it will take effect, since the timeline itself may still move.

For the wider picture on the draft bill and where the Leasehold and Freehold Reform Act 2024 currently stands, see our guide to leasehold reform.

What Existing Leaseholders Can Do Right Now

If you are unhappy with your ground rent under an existing lease, current options do not depend on the proposed cap becoming law:

• A statutory lease extension. Since 31 January 2025, leaseholders no longer have to wait 2 years after buying before starting a statutory lease extension claim. Under the lease extension rules currently in force, a qualifying flat lease extension already adds 90 years to the term at a peppercorn ground rent going forward. The Leasehold and Freehold Reform Act 2024 would increase that standard extension term to 990 years, but that specific change is not yet in force, and the premium you pay for an extension is still calculated under the existing valuation rules, including marriage value where it applies (see our leasehold reform guide on what has and has not changed there).
• Negotiating directly with your freeholder. Some freeholders will agree, informally and for a fee, to vary an onerous ground rent clause without going through a full statutory lease extension, particularly where it is making the property hard to mortgage or sell.
• Free, impartial advice. The Leasehold Advisory Service (LEASE) is the government-funded advisory body for leasehold and commonhold questions in England and Wales, and does not charge for general guidance on your options.

This article explains the general state of ground rent law in England and Wales and is not a substitute for advice on your specific lease. For the wider reform picture, see leasehold reform and service charges, or the UK Property Law hub. If you are managing a leasehold property as part of an estate, see the Wills and Probate hub.