Ground Rent Revolution: A New Era for Leaseholders

In a landmark move for the UK property sector, the government has officially introduced the Draft Commonhold and Leasehold Reform Bill this January. This legislation represents one of the most significant shifts in property ownership rights in a generation, specifically targeting the "feudal" nature of the leasehold system.

At the heart of the reform is a new £250 annual cap on ground rents for existing leaseholders. For years, escalating ground rent clauses have left many homeowners in "fleecehold" traps, making properties difficult to sell or remortgage. Under the new rules, these charges will be capped immediately, with a long-term transition plan to reduce all ground rents to a nominal "peppercorn" (effectively zero) over the coming decades.

Beyond the financial relief, the bill also proposes to abolish "forfeiture"—a controversial practice where leaseholders could lose their entire home over debts as small as £350. By encouraging a shift toward Commonhold structures, the government is handing the keys of management back to the residents themselves. For the property market, this is expected to "unblock" thousands of stalled sales, particularly in the flat and apartment sector, providing a much-needed boost to market mobility as we head into the spring.