"The government will announce a cap on ground rents paid by leaseholders in England and Wales on Tuesday morning, the BBC understands. Labour's 2024 election manifesto promised to "tackle unregulated and unaffordable ground rent charges". However, there had been suggestions the government could retreat from its claim due to concern about the potential impact on pension funds. The government has not yet confirmed where it will set the cap, but campaigners have said they believe 250 a year is likely."
"There are around five million leasehold homes in England and Wales, where people own the right to occupy a property via lease for a limited number of years from a freeholder. Leaseholds is the default tenure for privately-owned flats, and the Land Registry estimates that 99% of flat sales in 2024 in England were leasehold. Ground rents were abolished for most new residential leasehold properties in England and Wales in 2022, but remain for existing leasehold homes."
The government will cap ground rents paid by leaseholders in England and Wales, with campaigners expecting a limit around £250 per year. Approximately five million leasehold homes exist, with leasehold the default for privately-owned flats and 99% of 2024 flat sales being leasehold. Ground rents were abolished for most new residential leaseholds in 2022 but continue for existing leases. Leasehold owner-occupiers reported a median annual ground rent of £120 in 2023/24. The housing minister previously preferred an effectively zero cap. Officials have expressed concern about effects on pension funds that own freeholds, and legal and political pushback has been flagged.
Read at www.bbc.com
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