leasehold reform ground rent act 2022
Ground Rent

Leasehold Reform Ground Rent Act 2022 | Key Insights

Are you tired of being trapped in a leasehold agreement with skyrocketing ground rent fees? Well, get ready for some exciting news – the Leasehold Reform Ground Rent Act 2022 is here to shake things up! In this blog post, we’ll dive into all the details about this groundbreaking reform and how it could potentially revolutionize the world of leasehold properties. Stay tuned to find out how this new legislation could benefit you as a homeowner or investor.

What is the Leasehold Reform (Ground Rent) Act 2022?

The Leasehold Reform (Ground Rent) Act 2022 is very important. It deals with the rising concerns about high ground rents in leasehold properties. Living in a leasehold home means you have the right to be there for a set number of years. You pay ground rent each year to the owner for this time.

Introduction to Leasehold Ownership

Leasehold ownership is common in the UK. It’s different from owning a home completely. You have the right to stay in your home for a fixed time, usually between 99 to 999 years. You pay an agreed fee each year to the property’s owner.

Controversies Surrounding Escalating Ground Rents

Having ground rents that go up, sometimes even double, has caused a lot of problems. It has made living in leasehold homes very expensive. This has raised worries about how people can afford to keep living there.

The Need for Government Intervention

The issues with rising ground rents made the government act. They brought in the Leasehold Reform (Ground Rent) Act 2022. This law aims to make the leasehold system fairer and clearer across England and Wales.

leasehold property legislation

Key Provisions of the Leasehold Reform Ground Rent Act 2022

The leasehold reform ground rent act 2022 makes big changes in how ground rents work in the UK’s property scene. It includes setting the maximum ground rent at one peppercorn per year.

Ground Rent Capped at One Peppercorn per Year

According to the new ground rent legislation, ground rent for new homes can’t be higher than a peppercorn a year. This change benefits leaseholders by cutting their costs to zero, from what could be high and rising ground rents.

Even retirement homes will get this benefit, but not until early 2023. This gives time for the change to happen smoothly.

Exceptions to the Act

Although big changes are on the way thanks to the leasehold reform ground rent act 2022, some cases won’t apply. The ground rent cap won’t include:

  • Existing leases
  • Leases agreed before 30 June 2022
  • Business leases
  • Statutory lease extensions
  • Community housing leases
  • Home finance plan leases

These exceptions are there to avoid trouble with certain existing deals. They also make sure the law works without problems across leasehold property legislation and leasehold property in England and Wales.

Leasehold Reform Ground Rent Act 2022

If existing leaseholders decide to extend their lease informally, the new ground rent will be set to zero. This is different from formal lease extensions, where the ground rent goes down to nothing after the extension. This change happens for the whole extended lease time.

Impact on Existing Leaseholders

The new law, the Leasehold Reform (Ground Rent) Act 2022, means big relief for existing leaseholders. Now, any new lease extension, whether officially granted or not, will only cost a symbolic amount called a peppercorn. This protects leaseholders from having to pay more ground rent, making owning a home more affordable and stable.

Penalties for Non-Compliance by Landlords

Local councils can now fine landlords up to £30,000 for each lease that qualifies under the new law. This fine comes if a landlord asks for ground rent and doesn’t give it back, not within 28 days. This strict rule helps stop landlords from ignoring the new restrictions on ground rent and ensures leaseholders’ rights are upheld.

leasehold reform ground rent act 2022

Future Measures and Reforms

The government aims to keep improving the leasehold system even after the Leasehold Reform (Ground Rent) Act 2022. New steps are coming to give leaseholders more power and ensure the property market is fair.

Right to Extend Leases to 990 Years at Zero Ground Rent

Soon, leaseholders may get a big change: they could extend their leases to 990 years without any ground rent to pay. This is major for giving leaseholders more control and cutting the cost of rising ground rents.

Online Calculator for Lease Extensions and Freehold Purchases

A new online tool is in the works to show leaseholders the costs of lease extensions or buying the freehold. This calculator will make things clearer, helping leaseholders know their rights better.

Crackdown on Escalating Ground Rents

The government is also taking steps to fight against rising ground rents through the Competition and Markets Authority. Big homebuilders are promising to set ground rents back to the initial rate, which is a big move against unfair leasehold practices.

leasehold reform ground rent act 2022 lease extension

Background and Context

The government has been getting ready for the Leasehold Reform (Ground Rent) Act 2022 for a while. In 2017, it launched the housing white paper, ‘Fixing our broken housing market’. After that, a document called ‘Tackling unfair practices in the leasehold market’ was shared. It searched for ways to deal with unfair and unreasonable activities related to leasehold, like high ground rents.

With the Act 2022, the government is making the first move to improve home buying, making it fairer and safer.

Government’s Housing White Paper and Consultations

The housing white paper from the government set the stage for the Act 2022. It pointed out issues with leasehold laws, such as rising ground rents. This led to more talks and the creation of the new Act.

Tackling Unfair Leasehold Practices

After the white paper, the government shared ‘Tackling unfair practices in the leasehold market’. It detailed steps to fight against unfair leasehold rules, mainly focusing on heavy ground rents. The Leasehold Reform (Ground Rent) Act 2022 is the first big legal step towards these goals.

Practical Implications and Exemptions

The new Leasehold Reform (Ground Rent) Act of 2022 is a game changer for the leasehold property legislation in the UK. Starting from June 30, the maximum ground rent allowed on new leases in England and Wales is one peppercorn per year. This means no more regular charges. Landlords can give new long leases on homes, but the ground rent must be only a nominal peppercorn.

But, some leases won’t fall under this Act. It won’t count for leases used in businesses, certain financial plans (like buying a home), and some community housing projects. The Act also won’t change current leased homes, making the shift to new lease rules a slow process.

Exemption Details
Business Leases The Act doesn’t touch leases meant for business use.
Financial Products It leaves out deals related to home buying and certain financial products.
Community Housing Some community housing schemes might not be affected by the Act.
Existing Leases Leased properties already in action before June 30, 2022, won’t face the Act’s changes either.

Knowing about these changes and who they apply can help both experts in leasehold property legislation and people who lease homes. This way, everyone can manage the effects of the Leasehold Reform (Ground Rent) Act 2022 better.


The Leasehold Reform (Ground Rent) Act 2022 is a big step for the government. It aims to make the housing system fairer for more people. By setting ground rents at a peppercorn, the Act tackles the issue of rising ground rents. This move will help leaseholders, even though some properties are not covered.

This Act is good news for homeowners. It fights for their rights by changing how leases work and getting rid of ground rent. These changes are important in solving many problems, like how leases are extended, how buildings are managed, and how costs are shared.

In the future, more good changes are coming. Homeowners might be able to extend their leases for a very long time without paying ground rent. They will also have an easy way to check how much it will cost. The government is really serious about making things better for people who own leasehold homes.


How does the Leasehold Reform (Ground Rent) Act 2022 address the issue of ground rents?

This new law stops landlords from charging more than a peppercorn in ground rent. It also covers retirement homes. But, it won’t start for them until 2023.

Are there any exceptions to the Leasehold Reform (Ground Rent) Act 2022?

Yes, certain leases won’t fall under this law. For example, leases made before 30 June 2022. It also doesn’t apply to some business or home finance plan leases.

How does the Act impact existing leaseholders?

The law is friendlier for existing leaseholders too. If they renew their lease informally, they won’t pay ground rent. This is different from formal renewals, where all ground rent drops to zero.

What are the penalties for non-compliance by landlords?

Landlords who don’t follow the Act could face big fines. They might pay up to £30,000 for each lease if they don’t stop charging ground rent quickly enough.

What future measures are planned as part of the leasehold reform?

More changes are on the way. Leaseholders might get the right to renew for 990 years with no ground rent. The government also wants to make buying your home’s freehold easier. Plus, they aim to stop rents from going up too much.

What was the background and context leading to the Leasehold Reform (Ground Rent) Act 2022?

The Ground Rent Act was a long time coming. The government first looked at leasehold in 2017. They’ve been working on fairer rules since then. Actions have included stopping high ground rents.


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