MPs Urge Earlier £250 Cap on Leasehold Ground Rents

A cross-party committee of MPs called for the planned £250 yearly cap on ground rents in England and Wales to take effect in late 2027 instead of the government's target date of late 2028. The committee said leaseholders have waited too long for successive governments to address the issue. It recommended that the cap begin two months after the bill becomes law.

Ground rent is an annual fee paid by leaseholders to freeholders for the right to occupy land. It is separate from service charges that cover building maintenance. The English Housing Survey estimated the average annual ground rent at £304 in 2023/24. Many existing leases include clauses that double the rent or tie increases to inflation, which can complicate sales and mortgages.

The government's draft Commonhold and Leasehold Reform Bill would also ban new leasehold flats and ease conversion to commonhold ownership. The committee urged the government to introduce the final bill in the autumn so it could become law by mid-2027.

The government has described the legislation as an urgent priority and said a new commonhold framework should operate before the end of the current Parliament. It has defended a 40-year transition to peppercorn ground rents as balanced and realistic.

The committee said it was not convinced a shorter 20-year transition would create unacceptable legal risk. It also recommended creating an independent regulator for property management agents and including additional Law Commission proposals in the final bill.