UK to cap ground rents at £250 a year in property overhaul

Prime Minister Keir Starmer announced a plan to cap ground rents at £250 a year and to phase permitted ground rents to a nominal peppercorn over 40 years, a reform the government says will affect more than 5 million leaseholders in England and Wales.

Prime Minister Keir Starmer announced a plan to cap ground rents at £250 a year as part of an overhaul of Britain’s leasehold system. The measure follows a 2024 Labour manifesto pledge to tackle unregulated and rising ground rent charges. The government said the reform would apply across England and Wales and eventually reduce permitted ground rents to a nominal "peppercorn" after 40 years. Officials also announced a ban on new leasehold flats. Key details: - The cap is set at £250 a year for ground rents. - The reform is reported to affect more than 5 million leaseholders in England and Wales. - Permitted ground rents are to be reduced to a nominal "peppercorn" over a 40-year period. - The government announced a ban on new leasehold flats. - Freeholder groups said a retrospective cap would interfere with existing contracts, and the article mentions asset manager M&G saying the changes could harm savers and set a worrying precedent. - The government said the plan would help unblock stalled home sales and save some families thousands of pounds over a lease. Summary: The government says the changes are intended to lower long-term charges for leaseholders and ease stalled home sales, while some industry groups warn of legal and investment consequences. Undetermined at this time.