Ground Rent Cap 2026: What the Leasehold Reform Changes Mean for Homeowners

When you own a leasehold property, you own the property for the length of the lease, but you do not own the land it sits on.

Ground Rent is therefore a fee paid by leaseholders to the freeholder for the right to occupy that land.

The amount payable and the terms of payment vary depending on the individual lease, but the Ground Rent is typically paid annually.   

Unlike a Service Charge, the Ground Rent does not pay for any ongoing work or maintenance of the property.

Historically, some leases included provisions allowing for the rent to increase over time, and in some cases, they even permitted the doubling of Ground Rent over time.

These types of escalating charges have given cause for concern in the past, since they have made properties harder to sell or remortgage and deterred not only lenders but also prospective buyers from proceeding.

Today, Ground Rent remains an issue, prompting the urgent need for change. 

The government has estimated that: “approximately 3.8 million properties still attract ground rent across England and Wales, with homeowners collectively paying more than £600 million in 2025’’.

In addition, The English Housing Survey estimates that ‘’the average annual ground rent in 2023/2024 was £304.’’

For many leaseholders, a £250 cap will result in hundreds, or possibly thousands, of pounds saved over the course of their lease, helping to improve their cost of living.

Prime Minister, Keir Starmer, described the reform as “good news for homeowners”, and says that he has spoken to lots of people who claim that this will “make a difference to them of hundreds of pounds”. 

In addition, forfeiture will also be abolished and replaced with a new, fairer system.

Currently, forfeiture allows a landlord to end a lease early if the tenant defaults, most commonly by failing to pay rent.

Under the proposed changes, leaseholders would no longer face the risk of losing their home due to unpaid Ground Rent.

Several professional bodies have therefore welcomed these reforms, which are set to come into force in 2028, including the Leasehold Advisory Service, RICS and the National Residential Landlords Association (NRLA).

In support of the reform, Martin Boyd, Chair of the Leasehold Advisory Service, stated that “the draft Bill tackles some of the most damaging features of leasehold, including high and escalating ground rents and the threat of forfeiture, which has left some leaseholders at risk of losing their homes over relatively small debts”.