Consultation launched on restricting ground rent for existing leases

The Department for Levelling Up, Housing and Communities opened a consultation on 9 November 2023 on capping the maximum ground rent that residential leaseholders can be required to pay in England and Wales¹. The consultation ran from 7am on 9 November 2023 to 11:59pm on 17 January 2024, after being extended by four weeks from its original closing date¹. It applies to England and Wales¹.

The consultation set out five options for how the government could intervene: capping ground rents at a peppercorn; setting a maximum financial value for ground rent; capping ground rents at a percentage of the property value; limiting ground rent to the original value when the lease was agreed; and freezing ground rent at current levels¹.

The government said it had already legislated to restrict new residential leases to a peppercorn ground rent, and that the consultation examined extending that protection to existing leaseholders¹. It cited the Ground Rent Act 2022, which limits ground rent on new leases to one peppercorn per year, effectively setting the rate to zero¹. It also referred to the Leasehold and Freehold Reform Bill, which it said would be introduced to Parliament soon and would go further¹.

An impact assessment for the consultation was published on 6 December 2023¹. A Welsh translation of the consultation was also published¹.

Why it matters for households

Ground rent is a periodic payment made by a leaseholder to the freeholder under the terms of a lease. The consultation concerned existing leases, meaning leases already in place, rather than new ones, which are already subject to the peppercorn limit set by the Ground Rent Act 2022¹. Any cap would therefore affect people who already hold a leasehold home in England and Wales and currently pay ground rent under its terms¹.

The five options would produce different outcomes for those households. Capping at a peppercorn would reduce the required payment to effectively nothing, as the government describes the 2022 Act as doing for new leases¹. Setting a maximum financial value, a percentage of property value, or the original value when the lease was agreed would each tie the permitted rent to a different measure, while freezing would hold it at current levels¹. The consultation did not state which option would be chosen, and the government said it would consider all responses before replying¹.

The government said that, subject to the outcome of the consultation, it aimed to introduce reforms through the Leasehold and Freehold Reform Bill¹. No cap was in force for existing leases at the time of the consultation, and the consultation itself did not change what leaseholders were required to pay¹.

What happens next

The consultation closed on 17 January 2024¹. The page records that a summary of responses was added on 19 March 2026, and that the consultation has concluded¹. The summary of responses is published as a 98-page PDF and, the government says, should be read alongside its policy statement on addressing unregulated and unaffordable ground rent¹. The government said it aimed to introduce reforms through the Leasehold and Freehold Reform Bill, subject to the outcome of the consultation¹.