Ground Rent: What You Need to Know
Understand your obligations and the recent reforms affecting ground rent payments
Last updated: July 2026
What is Ground Rent?
Ground rent is a payment made by a leaseholder to their freeholder for the land on which their property stands. Unlike service charges, which pay for building maintenance and communal services, ground rent provides no direct benefit to the leaseholder.
Ground Rent
Payment to the freeholder for the land. Fixed or escalating amounts with no service in return.
Service Charge
Payment for building maintenance, repairs, insurance, and communal areas. Should reflect actual costs.
Types of Ground Rent
Your lease specifies how ground rent is calculated. Common types include:
Fixed ground rent
A set amount (e.g., £100/year) that remains the same throughout the lease.
Doubling clauses
Ground rent doubles at set intervals (e.g., every 10-25 years). A £250 rent can become £8,000+ over a long lease.
RPI-linked
Ground rent increases with the Retail Price Index. More predictable, but can still rise significantly.
Peppercorn rent
A nominal rent (often £0). All new qualifying leases since June 2022 must use peppercorn rent.
Recent Reforms
The Leasehold Reform (Ground Rent) Act 2022 introduced significant changes:
Key Changes (from 30 June 2022)
- New long residential leases must have a ground rent of zero (peppercorn)
- Applies to leases over 21 years for flats and houses
- Freeholders cannot charge admin fees for collecting peppercorn rent
When you extend the lease of a flat using the statutory process, your ground rent is reduced to a peppercorn (zero) for the whole of the new term. (For houses, the statutory 50-year extension under the Leasehold Reform Act 1967 instead carries a "modern ground rent"; the Leasehold and Freehold Reform Act 2024 is due to replace this with 990-year peppercorn extensions once those provisions are brought into force.) However, the 2022 Act does not apply retrospectively to existing leases. See GOV.UK guidance for more.
Further reforms are underway. The Leasehold and Freehold Reform Act 2024 is being brought into force in stages — the two-year ownership requirement for statutory lease extensions was abolished on 31 January 2025, while 990-year peppercorn lease extensions and the new valuation scheme await commencement. In January 2026 the government published the draft Commonhold and Leasehold Reform Bill, which proposes capping ground rents on existing leases at £250 a year (falling to a peppercorn after 40 years) and abolishing forfeiture of residential leases. These proposals are not yet law — check GOV.UK for the latest position before making decisions based on them.
Payment Obligations
Ground rent is a contractual obligation. Failing to pay can have serious consequences, but there are important protections in place.
Forfeiture Risk
If unpaid, the freeholder may seek to forfeit your lease. However, forfeiture can only proceed if:
- • The arrears exceed £350, OR
- • The arrears have been outstanding for more than 3 years
The freeholder must serve a Section 166 notice giving you at least 30 days to pay. For residential leases, they must also obtain a court order – there is no right to peaceable re-entry.
Relief from Forfeiture
Courts generally grant relief from forfeiture if the tenant pays all arrears and the landlord's costs promptly. The court has wide discretion, and forfeiture is considered a last resort. If you receive forfeiture proceedings, seek legal advice immediately.
Your Rights
- You don't have to pay until you receive a proper written demand
- The demand must be in prescribed form (Section 166 notice)
- You have at least 30 days from the demand to pay
For detailed guidance, see LEASE's ground rent advice.
Your Options
If you have escalating ground rent, you have several options:
- Extend your lease - For a flat, the statutory process reduces ground rent to peppercorn, and the cost of buying out the rent is included in your premium. For a house, the current statutory extension instead carries a "modern ground rent" — take advice before proceeding.
- Collective enfranchisement - Buy the freehold with your neighbours and eliminate ground rent entirely.
- Negotiate informally - Some freeholders may agree to vary terms. Always ensure any new lease has peppercorn rent.
Voluntary schemes: Some developers offer ground rent reduction schemes. Always get independent legal advice before agreeing to any lease variation.
How OpenCourtyard Helps
Ground rent issues affect many leaseholders. OpenCourtyard helps you connect with neighbours to share experiences and coordinate action:
Share experiences
Learn from neighbours who have dealt with ground rent disputes or lease extensions with your freeholder.
Community discussions
Discuss concerns with your building community and explore collective solutions together.
Further Resources
Important: This guide provides general information and is not legal advice. Laws and procedures change – always verify current rules with official sources and consider seeking professional advice for your specific situation.
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