Ground rent on a leasehold flat: what you pay and how it can change

Ground rent at a glance

What are the ground rent rules today?

We update this strip when the law changes. For every leasehold reform and its status, see what is in force in leasehold reform.

What is ground rent, and who do I pay it to?

Ground rent is a payment the lease says you make to your landlord, usually the freeholder of the building. It is separate from the service charge. The service charge pays for running and repairing the building. Ground rent pays for nothing in particular: it is the landlord’s return for owning the freehold.

Three things in the lease decide what you pay:

• The starting amount: the yearly figure, which can be anything from a peppercorn to several hundred pounds or more.
• How it changes: a fixed figure for the whole term, a rise by a set amount, a doubling every so many years, or a rise in line with an index such as RPI.
• When it changes: the review dates, counted from the start of the lease, not from when you bought.

When you buy a flat, the lease comes with it, so you take on its ground rent terms exactly as written. A new owner does not get a fresh start: if the lease began before 30 June 2022, the 2022 rules do not reach it, even if you buy it today.

How much will my ground rent be in 10, 25 or 50 years?

Use the projector at the top of this page with the figures from your lease. Here are four example leases, each starting at £250 a year, worked out by the same projector:

The starting rent is the same in every row; the review clause makes the difference. A 10-year doubling turns £250 into £8,000 by year 51. A 25-year doubling, or an index rising at 3% a year, climbs far more slowly.

A formal lease extension replaces the ground rent with a peppercorn. See what a formal extension might cost with our lease extension premium estimate. That estimate does not model a rising rent, and the projector does not value a premium.

Do I pay ground rent on a lease granted after 30 June 2022?

Usually not. The Leasehold Reform (Ground Rent) Act 2022 limits the ground rent on most new long leases of a single home, sold for a premium, to a peppercorn. A peppercorn has no money value, so there is nothing to pay. It applies to leases granted on or after 30 June 2022, and to leases of retirement homes granted on or after 1 April 2023.

Points that catch people out:

• It is the date the lease was granted that counts, not the date you buy. A flat with a 2015 lease keeps its 2015 ground rent.
• A voluntary lease extension agreed with the freeholder after 30 June 2022 can keep the old ground rent for the rest of the original term, but no more than the original amount. The added years must be at a peppercorn.
• A formal lease extension under the 1993 Act is not covered by the 2022 Act, because the 1993 Act already sets a peppercorn rent for the new lease.
• Some leases are left out: business leases, community-led housing and certain home finance products.
• No admin fee can be charged for collecting a peppercorn rent.

If a landlord asks for ground rent the 2022 Act does not allow, they must refund it within 28 days, and Trading Standards can fine them between £500 and £30,000.

When does ground rent actually become due?

On a long lease of a home, ground rent is not due until the landlord sends you a written demand. This rule is in section 166 of the Commonhold and Leasehold Reform Act 2002. The demand must say how much is due and the date to pay. That date must be at least 30 days and no more than 60 days after the demand, and not earlier than the date in the lease.

So if no demand has arrived, you do not have to pay yet. But the debt does not go away: GOV.UK says a landlord can recover unpaid ground rent going back 6 years.

Can a landlord take the flat back for unpaid ground rent? In England and Wales, a landlord of a long lease cannot start forfeiture for unpaid rent, service charge or admin charges unless the arrears are over £350, or part of them has been owed for more than 3 years. Forfeiture goes through the court, and a lender with a mortgage on the flat is likely to step in before then. If you are selling, expect any arrears to be settled by completion.

On a sale, the freeholder’s or managing agent’s reply to the buyer’s questions shows the ground rent, when it is next due and any arrears. See what is in the management pack.

Which ground rent clauses make a flat harder to sell or mortgage?

A buyer’s lender looks at the ground rent as well as the lease length. Each lender sets its own rules. The clauses that cause most trouble are:

• A short doubling period, such as every 10 or 15 years, because the rent climbs fast within one mortgage term (the example table above shows how fast).
• A high starting rent compared with the flat’s value.
• An index-linked rent with no limit on how much one review can add.

Example of one lender’s public rules:

Lenders change their criteria, and each one is different. Your own lender’s instructions to us on your purchase are what count. We are not mortgage advisers: for which lenders will consider this ground rent, speak to a mortgage adviser.

One old worry has gone. In England, until 27 December 2025, a long lease with a ground rent above £250 a year (above £1,000 in Greater London) could count as an assured tenancy, which in theory let a landlord seek possession for rent arrears on a housing law ground. Since that date a tenancy for a fixed term of more than 21 years cannot be an assured tenancy, whatever the rent.

If you are buying and the ground rent doubles, ask before you exchange whether the seller or freeholder will change it. If you are selling, find out early whether a buyer’s lender is likely to accept it.

Can I reduce my ground rent or get rid of it?

There are three routes, and each one ends in a different place:

An informal lease extension is a fourth option, but on a lease extended after 30 June 2022 the old rent can carry on for the original term, so check what the new lease says before you agree. For the formal route, see how the formal route works, step by step.

Will the proposed £250 cap change my ground rent?

Not yet. On 27 January 2026 the government published a draft Commonhold and Leasehold Reform Bill. It proposes capping ground rents on existing leases at £250 a year, changing to a peppercorn after 40 years. A draft Bill is not law: it can change before Parliament passes it, and no start date has been set.

Until then, your lease decides what you pay. Use the projector to see when your rent would go above £250; that is the point where the cap would make a difference if it becomes law as drafted. For the latest status, see what is in force in leasehold reform.

Is ground rent law different in Wales?

• The 2022 peppercorn rule applies in Wales too, from 30 June 2022. The Welsh Government publishes its own guidance.
• The written demand rule (section 166) applies in England and Wales.
• The forfeiture limits (£350 or 3 years) are the same in Wales, set by Welsh regulations made in 2005.
• The draft Bill’s £250 cap is marked by the government as applying to England and Wales.
• Disputes about a lease extension premium in Wales go to the Leasehold Valuation Tribunal for Wales, not the First-tier Tribunal (Property Chamber).
• Our lease extension premium estimate covers flats in England only. The ground rent projector works the same anywhere, because it only follows the clause.

What do we check on the ground rent when you buy or sell a flat?

A flat is sold with its lease, so the lease is part of the legal work. Alongside the usual conveyancing, we check how many years are left on the lease, the ground rent and the service charge, and the information supplied by the freeholder or managing agent.

From our quote requests (website quote requests, 2 September to 29 October 2026):

• About 1 in 4 buying requests were for a leasehold home (167 of 670), and about 1 in 4 selling requests (35 of 143).
• 35 of the 670 people asking for a buying quote did not know whether the home was freehold or leasehold. The listing or the title register at HM Land Registry will tell you; if it is leasehold, ask for the ground rent and its review clause straight away.
• 222 quote requests in all involved a leasehold home: 167 buying, 35 selling, 12 buying and selling, and 8 remortgages.

What does our leasehold work cost?

Leasehold and new-build homes are priced on a higher fee scale, and a leasehold home also has “Dealing with Leasehold” (£150 + VAT) and a new-build home “New Build Property” (£250 + VAT).

We give you a written, itemised quote before you instruct us. More about our leasehold work.

What happens next

• Selling or buying a flat with a short lease
• Changing a lease by deed of variation
• Selling a leasehold flat: the management pack
• How the formal lease extension route works
• More leasehold, explained