Published: 01/05/2022 By Allan Fuller
The UK Government’s ban on charging ground rent on new leases in England and Wales will come into force on 30 June 2022.
Landlords will be banned from charging ground rent to future leaseholders, under a new law that will lead to fairer, more transparent homeownership. It will also apply to retirement homes, which will come into force no earlier than 1 April 2023, and more details will be confirmed in due course.
Many landlords have already reduced ground rent to zero for homebuyers starting a new lease with them. Anyone preparing to sign a new lease on a home in the next two months should speak to their landlord to ensure their ground rent rate reflects the upcoming changes.
Agents should be ready to understand the implications and the material information they need to provide to consumers when these properties come on the market.
Measures which were announced in 2021, include a new right for leaseholders to extend their leases to 990 years at zero ground rent and an online calculator to help leaseholders find out how much it would cost to buy their freehold or extend their lease.
In addition, thousands of existing leaseholders have also already seen a reduction in their inflated ground rent costs. The Competition Market Authority (CMA) secured commitments with major homebuilders to stop doubling ground charges every year for leaseholders.