What is ground rent?
Ground rent is rent payable to your landlord under your lease. It is separate from service charges for maintaining or managing the building. Whether you owe it, the amount and any review formula depend on your lease and the law that applies to it. LEASE explains ground rent (opens in a new tab).
General information checked on 8 October 2026, not legal advice. A reform announcement does not change an existing payment obligation. Have your lease and any variation checked before signing.
Types of ground rent
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Fixed or increasing rent
Some leases set a fixed amount. Others review it at specified intervals, for example by doubling it or linking it to the Retail Price Index. An index-linked rent is not a fixed future price. Read the formula, review dates and any limits together.
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Peppercorn rent
A peppercorn has no financial value. The 2022 Act limits rent on regulated leases to one peppercorn a year. It does not convert every existing lease to a peppercorn.
See LEASE on rent increases (opens in a new tab) and GOV.UK on the peppercorn limit (opens in a new tab).
Reforms already in force
The Leasehold Reform (Ground Rent) Act 2022 generally covers new leases of a single dwelling granted for a premium, for a term exceeding 21 years, from 30 June 2022. For retirement homes, the relevant date is 1 April 2023. Earlier binding contracts and specified exceptions can exclude a lease. The Act also prohibits administration charges for collecting its peppercorn rent. Read the government's eligibility guidance (opens in a new tab) and commencement regulations (opens in a new tab).
Exceptions matter
Business leases, qualifying community-led housing and certain financial arrangements have exceptions. Shared ownership rent on the landlord's share is treated separately. Buying an older lease from its existing owner does not itself create a new regulated lease. Check the exceptions before relying on the cap (opens in a new tab).
If prohibited rent has been demanded or collected under the 2022 Act, contact Trading Standards for advice about enforcement and recovery. In Wales, read the Welsh enforcement guidance (opens in a new tab).
Payment obligations
Ground rent under a long residential lease is not payable until the landlord serves a valid section 166 notice in the prescribed form. England and Wales use different forms. The payment date must be 30–60 days after the notice is given and cannot precede the lease's due date. Keep the landlord informed of your correspondence address. Read the demand-notice rules (opens in a new tab).
Unpaid rent can still put your home at risk
The small-debt protection generally prevents forfeiture for rent, service charges or administration charges unless the unpaid amount exceeds £350, or includes an amount payable for more than three years. Passing that threshold does not automatically end the lease; other legal requirements still apply. It also does not prevent a debt claim for a smaller sum. LEASE explains non-payment (opens in a new tab).
Get legal help promptly if the landlord threatens forfeiture. Do not assume that paying later will automatically stop proceedings or remove legal costs.
Your options
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Statutory lease extension
For a qualifying flat, the current statutory extension adds 90 years and reduces ground rent to a peppercorn for the new lease. A house extension follows different rules: the current 50-year route can introduce a modern ground rent during the extension. GOV.UK explains the current extension routes (opens in a new tab); LEASE covers houses (opens in a new tab).
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Buy the freehold
Buying your house's freehold, or buying a block's freehold with other qualifying leaseholders, may offer a route to remove ground rent. For a share of freehold, the leases still need to be addressed: ownership of shares alone does not rewrite their rent clauses. Read LEASE's options for reducing rent (opens in a new tab).
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Negotiate a variation or informal extension
Ask a solicitor to check the whole bargain, including the premium and future review terms. An informal extension may retain the existing rent for the remainder of the original term; the extended part is subject to the 2022 Act's peppercorn rules where applicable. GOV.UK explains replacement leases (opens in a new tab).
Compare the total cost and eligibility of each route. There is no reliable universal price for removing ground rent, and this guide does not assume a particular saving.
What changes next?
The proposed £250 cap is not current law
The draft Commonhold and Leasehold Reform Bill proposes a £250 annual cap for older residential leases, reducing to a peppercorn after 40 years. The government's 7 September 2026 explainer still describes this as a proposal requiring Parliament's approval. It is not a reason to reduce today's payment to £250. Read the latest government explainer (opens in a new tab).
The draft Bill also proposes replacing forfeiture. That protection is not in force merely because the draft was published. Read the draft Bill publication (opens in a new tab).
The 2024 Act's 990-year peppercorn extensions and new valuation arrangements also await implementation. The September explainer says regulations and corrections through the forthcoming Bill are needed. No fixed commencement date is given there. Take advice before delaying a transaction in anticipation of those changes. Check the implementation position (opens in a new tab).
How Residents Circle helps
Use the community forum to compare experiences and discuss collective options with neighbours. Each lease still needs its own review; a neighbour's ground rent clause may differ from yours.
- Keep your lease, rent demands, payment records and any variation together.
- Check the next rent review date before starting a sale or remortgage.
- Get independent advice before agreeing to new rent terms.