Leasehold Reform (Ground Rent) Act 2022

The government's ban on charging ground rent on leases in England and Wales comes into force on 30 June 2022.

-Ground rent charges will be banned on most new residential leases from 30 June 2022.

-Ban will put an end to increasing annual costs.

-First step in government reform package to create fairer housing system, levelling up opportunities for more people.

-The prohibition on ground rents in these leases will not come into force before 1 April 2023. 

-From 30 June 2022, anyone buying a home on a new long lease will now be freed from the annual costs. Landlords will be banned from charging ground rent to future leaseholders. However, The Act will not apply to leases granted pursuant to a contract entered into prior to commencement of the Act, and it is subject to lease beyond 21 years.

-There will only be selected exceptions from this Act. These are tightly defined and include applicable community-led housing, certain financial products and business leases. 

-The Leasehold Reform (Ground Rent) Act will also restrict ground rent to zero on retirement properties, to ensure that those who live in retirement housing benefit from the same reform as other leaseholders. The changes to ground rent for retirement properties will come into force no sooner than 1 April 2023.

For existing leaseholders (of both houses and flats) who choose to extend their leases through the non-statutory (‘voluntary’) route, the ground rent will now be restricted to zero (‘a peppercorn’) on that newly extended term, under the Leasehold Reform (Ground Rent) Act. Millions of leaseholders will be given a new right to extend their lease by 990 years without the ground rent.