Government announces plans to impose a ground rent cap of £250 a year

Published January 27th 2026

Author

Charlotte Curtis

On 26 January, the Government announced plans to impose a ground rent cap of £250 a year.

Ground rents were abolished for most new residential leasehold properties in England and Wales in 2022, but this offered no assistance to those with existing leases. Some existing leaseholders have faced barriers to selling their properties due to the inclusion of onerous escalating ground rent clauses in their leases, known as the “ground rent trap”, and will welcome its eagerly awaited removal.

The news will be less welcome to those who have invested in buildings to generate an income via ground rent. The most immediate impact may be to those currently engaged in negotiations or contemplating seeking a lease extension. Those involved on both sides would be well advised to consider their positions further in light of this news.

Should you wish to discuss any of the issues raised in this article, please contact Charlotte Curtis or any member of our Property Litigation team.

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Author

Charlotte Curtis

Government announces plans to impose a ground rent cap of £250 a year

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