I’ve been writing about UK property for long enough to see the same pattern repeat itself: someone buys a flat, loves the location, signs the paperwork, and only later discovers the ground rent clause buried in the lease. By then, it’s often too late to do anything about it. The good news is that the rules are changing in a big way. The Leasehold and Freehold Reform Act 2024 introduces a £250 annual cap on ground rent for existing residential leases in England, once a commencement order is made — expected in 2026. For anyone currently paying more than that, or stuck with a doubling clause, this is the most significant shift in leaseholder rights in years.
That last figure — over 21,000 households — comes from the Competition and Markets Authority’s investigation into doubling ground rent terms. It’s a reminder that this isn’t a niche problem. It affects real people who found themselves trapped in homes they couldn’t sell or remortgage. The cap is designed to stop that from happening again. Here’s what you actually need to know.
If you’re in the process of buying a flat, or you already own one, understanding how ground rent works — and how the new rules change things — is essential. I’d also recommend reading our guide on leasehold vs freehold flats to see how the two ownership structures compare. And if you’re worried about hidden costs piling up, a property lawyer can review your lease before you commit.
What Ground Rent Actually Is — And Why It Became a Problem
Ground rent is an annual fee you pay to the freeholder — the person or company that owns the land your flat sits on. In theory, it’s a token payment that acknowledges the freeholder’s ownership of the land. In practice, it became something far more aggressive.
Through the 1990s and 2000s, developers and freeholders started inserting clauses that made ground rent double every 10 or 25 years. A £250 rent doubling every decade becomes £500 in year 11, £1,000 in year 21, and £2,000 in year 31. Mortgage lenders noticed. They began refusing applications on properties with these terms because the rent could become unsustainable within the mortgage term. The CMA found no evidence that ground rent was legally or commercially necessary, or that leaseholders received anything in return for paying it. That’s a striking admission from a regulator.
What I’d tell anyone looking at a flat today: check the ground rent clause before you do anything else. If it’s a new lease (after June 2022), you’re fine — ground rent is zero. If it’s an older lease, look for the words “doubles every” or “RPI-linked”. Those are the clauses that cause trouble. Our article on hidden costs of apartment ownership covers other fees you might not expect.
Why the Ground Rent Cap Matters for Buyers and Owners
The cap isn’t just a number on a page. It has real consequences for anyone buying, selling, or remortgaging a leasehold flat. The most immediate effect is on mortgageability. Lenders have been refusing mortgages on properties where ground rent exceeds 0.1% of the property’s value, or where doubling clauses exist. That has left thousands of leaseholders unable to sell or remortgage. The statutory cap gives lenders the certainty they need — many previously blocked sales and remortgages should become viable once the cap is in force.
Consider this scenario: you own a flat with a ground rent that doubles every 10 years, currently sitting at £500. Under the cap, the freeholder cannot demand more than £250 once the commencement order is made. That £500 demand becomes unlawful to the extent of the excess. The same applies to any review clause that would push rent above the threshold. The cap overrides the contractual clause, even though the clause itself remains in the lease document.
There’s a regional distinction worth noting. The cap is £250 in England but £100 in Wales. If you own a leasehold property in Wales with ground rent above £100, you’re affected even if your rent is below £250. That’s a lower threshold, and it catches more leases.
What I’d do if I were in your shoes: check your current ground rent against the cap for your region. If it’s above the threshold, you don’t need to do anything — the cap applies automatically once commenced. But if you’re planning to sell or remortgage before the commencement order is made, you may still face difficulties. A tenant landlord lawyer can advise on your specific situation.
Where People Get Ground Rent Wrong
I’ve seen the same misunderstandings come up again and again. Here are the most common ones, and what they mean for you.
Assuming the cap applies to all leases equally
It doesn’t. The £250 cap only applies to existing leases granted before 30 June 2022. Leases granted after that date already have zero ground rent under the Leasehold Reform (Ground Rent) Act 2022. If your lease was granted after June 2022 and you’re being charged ground rent, that’s a prohibited rent — and a criminal offence. The two regimes are separate, and mixing them up can lead to costly mistakes.
Thinking you need to renegotiate your lease
You don’t. The cap is automatic. Once the commencement order is made, the statutory cap overrides whatever your lease says. You do not need to vary the lease, reach an agreement with the freeholder, or take legal action for the cap to apply. The freeholder simply cannot demand more than £250, regardless of what the lease document states. That said, if your freeholder continues to demand above-cap ground rent after commencement, you can apply to the First-tier Tribunal to have the excess declared irrecoverable. Continued above-cap demands may also constitute a criminal offence.
Believing the cap fixes past overpayments
This is the one that catches people out. The cap applies to future demands only. It does not create a refund mechanism for ground rent you’ve already paid above the threshold. If you’ve been paying £500 a year for the last five years, you cannot use the 2024 Act to reclaim the excess. That’s a separate legal question, and one that may require specialist advice. A property lawyer can help you understand your options if you’ve overpaid.
Ignoring the cap because your ground rent is under £250
If your ground rent is already below £250, the cap doesn’t reduce it. Your freeholder continues to collect at the existing level. But here’s the nuance: if your lease contains a review clause that would push rent above £250 in the future, that clause becomes unenforceable above the cap. So even if you’re paying £200 now, a clause that would increase it to £300 in five years is effectively dead above the £250 mark. That’s worth knowing if you’re planning to hold the property long-term.
Our guide on top considerations when buying an apartment covers other leasehold pitfalls to watch for.
→ Scroll right to see all columns
| Lease Type | Ground Rent Position | What You Need to Do |
|---|---|---|
| New lease (after 30 June 2022) | Peppercorn (zero) — abolished | Nothing. Any ground rent demand is unlawful. |
| Existing lease, ground rent below £250 (England) / £100 (Wales) | Unchanged — continues at existing level | Nothing. Cap does not reduce your rent. |
| Existing lease, ground rent above £250 (England) / £100 (Wales) | Capped at threshold — excess unenforceable | Nothing. Cap applies automatically once commenced. |
| Existing lease with doubling or RPI-linked clause | Capped at threshold — clause partially void above cap | Nothing. Cap overrides the contractual clause. |
What to Do About Ground Rent — A Practical Guide
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Check your lease for the ground rent clause
This is the first step, and it’s the most important. Find the section of your lease that sets out the ground rent. Look for the current amount, how often it increases, and what triggers the increase. Common phrases include “doubles every 10 years”, “RPI-linked”, or “reviewed every 25 years”. If you can’t find it, or the language is unclear, ask a solicitor to review it. A property lawyer can do this remotely and quickly.
Compare your ground rent to the cap for your region
Once you know your current ground rent, compare it to the cap: £250 in England, £100 in Wales. If your rent is below the cap, the cap doesn’t change anything for now — but check whether your lease has a review clause that could push it above the cap in the future. If it does, that future increase becomes unenforceable once the cap is commenced. If your rent is already above the cap, the freeholder cannot demand more than the cap amount once the commencement order is made.
Understand the commencement timeline
The cap is law, but it’s not yet in force. It requires a commencement order via secondary legislation before it takes effect. The government has confirmed its intention to commence this provision in 2026, but the exact date has not been legislated. Until that order is made, your existing lease terms remain enforceable. If you’re planning to sell or remortgage before commencement, you may still face difficulties with lenders who are wary of high ground rent or doubling clauses. A tenant landlord lawyer can advise on how to handle this gap period.
Know what to do if your freeholder ignores the cap
Once the cap is in force, demands above the threshold are unlawful. If your freeholder continues to demand above-cap ground rent, you can apply to the First-tier Tribunal to have the excess declared irrecoverable. Continued above-cap demands may also constitute a criminal offence. Keep records of all correspondence and payments. If you’re unsure about the process, a property lawyer can guide you through the tribunal application.
- 1Find your ground rent clauseLocate the section of your lease that states the annual ground rent, how it increases, and when. If unclear, ask a solicitor to interpret it.
- 2Compare to the capCheck your current rent against £250 (England) or £100 (Wales). If above the cap, the excess becomes unenforceable once the commencement order is made.
- 3Watch the commencement dateThe cap is not yet in force. Monitor government announcements for the commencement order, expected in 2026. Until then, existing lease terms apply.
- 4Act if the freeholder ignores the capAfter commencement, above-cap demands are unlawful. Apply to the First-tier Tribunal to have excess declared irrecoverable. Keep records.
Frequently Asked Questions About Ground Rent
Does the ground rent cap apply to my lease if I bought my flat after June 2022? ▾
Can my freeholder increase ground rent above £250 after the cap is in force? ▾
What happens if my freeholder demands ground rent above the cap after commencement? ▾
Does the cap apply to leasehold houses, or only flats? ▾
I’ve already paid ground rent above £250 for years. Can I get that money back? ▾
Will the cap affect my ability to sell my flat before the commencement order is made? ▾
What This Means for You Right Now
The ground rent cap is a genuine step forward for leaseholders, but it’s not a magic wand. It doesn’t fix past overpayments, it doesn’t apply until the commencement order is made, and it doesn’t change the fact that you still need to read your lease carefully before buying. What it does do is give you a statutory floor — a guarantee that no matter what your lease says, you won’t be asked to pay more than £250 a year in ground rent once the law is in force. That’s a meaningful protection, especially if you’re looking at a flat with a doubling clause that would have made it unsellable a few years ago.
If this was useful, you might also want to read Essential Guide to Investing in Retirement Homes.
Sources and Further Reading
New Build Apartments in the UK: Are They Worth the Hype and the Price? — A balanced look at the pros and cons of buying new-build leasehold flats, including ground rent considerations.
Unshackling leaseholders from problematic ground rents. Competition and Markets Authority, 2026.
Ground Rent Cap 2026: What Leaseholders Need to Know. Neon Properties London, 2026.
Government announces major leasehold reform proposals – Why leaseholders should still rely on today’s law. Anthony Gold Solicitors, 2026.
