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.

It covers England and Wales. The 2022 Act extends only to England and Wales, and the draft bill is also an England and Wales measure. Scotland has no residential long-leasehold system (the Long Leases (Scotland) Act 2012 converted most remaining ultra-long leases into ownership), and Northern Ireland has its own rules, including a right under the Ground Rents Act (Northern Ireland) 2001 for a rent-payer to redeem a ground rent.

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), and was not granted under a contract made before that date, 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, as of late September 2026 the draft bill has not been introduced to Parliament, and no introduction date has been announced. 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 has said that, subject to parliamentary timings, this specific reform could come into force in late 2028. 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.

Frequently Asked Questions

Does the Leasehold Reform (Ground Rent) Act 2022 reduce my existing ground rent?

No, unless your lease was granted on or after 30 June 2022 (or 1 April 2023 for a retirement home). The Act only restricts ground rent on new leases granted from those dates; it does not reduce or cap ground rent under a lease granted earlier.

Is there a £250 cap on ground rent for existing leaseholders?

Not yet. A £250 a year cap, falling to a peppercorn after 40 years, is proposed in the draft Commonhold and Leasehold Reform Bill, which has not been introduced to Parliament. It is not current law, and the government has said that, subject to parliamentary timings, it could come into force in late 2028.

What is a peppercorn ground rent?

A peppercorn ground rent is a nominal or effectively zero rent, meaning no money can lawfully be charged or collected under the lease as ground rent. It is a legal term for a rent with no real monetary value.

Can my landlord still charge a doubling ground rent on an older lease?

If your lease was granted before 30 June 2022 and contains a doubling or escalating ground rent clause, that clause remains contractually enforceable under current law. The 2022 Act does not apply retrospectively to leases granted before its commencement.

What can I do now if my ground rent is high or increasing?

Current options include a statutory lease extension, which typically results in a peppercorn ground rent going forward once the extension completes, negotiating directly with your freeholder, or getting free advice from the Leasehold Advisory Service (LEASE).

Is the ground rent cap the same thing as the Leasehold and Freehold Reform Act 2024?

No. The proposed £250 cap for existing leaseholders is a provision of the separate, not-yet-introduced draft Commonhold and Leasehold Reform Bill, not secondary legislation made under the Leasehold and Freehold Reform Act 2024.

When will the ground rent cap for existing leaseholders become law?

There is no confirmed date. The draft bill has not been introduced to Parliament, and the government has said that, subject to parliamentary timings, the cap could come into force in late 2028. That depends on the bill being introduced and passed first.