Summary
The government plans to announce a new rule to limit ground rents for leaseholders in England and Wales. Ground rents are ongoing payments made by people who own leases for their homes. This change aims to address high ground rents, especially for existing leasehold homes.
Key Facts
- The new rule is intended to cap ground rents paid by leaseholders in England and Wales.
- Ground rents are regular payments made by leaseholders to the owner of the land (freeholder).
- There are about five million leasehold homes in England and Wales.
- Ground rents for most new leases were stopped in 2022, but existing leases still have them.
- There are discussions that the rent cap might be set at £250 a year.
- Pension funds, which own many of the freeholds, are concerned about financial impacts from the cap.
- The Labour party's 2024 election manifesto included a promise to address high and unregulated ground rents.
