Great news for leaseholders and conveyancers as from 27 January 2026, the draft Commonhold and Leasehold Reform Bill was published to cap ground rent at £250 a year before ultimately reducing it to a peppercorn after 40 years. This bill will need to make its way through Parliament with the Government saying the cap could come into force in late 2028.
This represents a significant step forward for Leaseholders who have had difficulties with escalating or high ground rents which cause issues when trying to sell or mortgage their properties.
The Leasehold Reform (Ground Rent) Act 2022 terminated ground rents for most new long residential leases. However, the passing of this new bill would assist in addressing unreasonable ground rents in older leases.
This is part of the government plans to make major changes to home ownership and to save leaseholders money which will assist with the cost-of-living crisis. The change will impact over 5 million leaseholders and future homeowners as new residential flats will be banned from being sold as leasehold and instead be commonhold. This means that flat buyers would own the ground and overall building where the flat is.
These changes could have a significant impact on leaseholders and future buyers. To understand how they may affect your property or transaction, contact our Residential Property team, who are here to provide expert advice and guidance.
