Ground Rent to be Outlawed - England and Wales

Published: 03/11/2023 By Allan Fuller

Minister of State (Housing and Planning) Rachel Maclean, MP, has confirmed that plans to phase out leasehold will be part of the King’s Speech on 7 November 2023. The Bill is expected to ban leaseholds for houses, but not new flats.

In a social media post , Mclean stated that the UK Government will restore true home ownership to millions of people. She did not provide further details but posted a link to a piece in the Sunday Times which reports that the UK Government would cap all existing ground rents at a very low rate, known as a "peppercorn" rate, which is an odd legal way of saying zero, and extend the standard contract lease extension from 90 years to 990 years.

The Department for Levelling Up, Housing and Communities (DLUHC) estimates that there are almost 5 million leasehold homes in England, 70% of which are flats. Almost all flats are sold on a leasehold basis compared to 7% of houses.  

Shadow Minister for Levelling Up, Housing, Communities and Local Government, Matthew Pennycook, MP, responded to the announcement by stating that if no further measures will form part of the King’s Speech leaseholders will have been failed, adding that Labour would fundamentally and comprehensively reform the leasehold system.