January, 2026
The UK government has announced a shake-up of the leasehold system, including a cap on ground rents at £250 per year and measures to make leasehold flats less costly and easier to sell. This could benefit millions of flat owners across England and Wales by reducing annual charges and improving marketability.
Millions of leaseholders across England and Wales are set to benefit from a major shake-up of the outdated leasehold system – with ground rents set to be capped at £250 a year, changing to a peppercorn cap after 40 years.
Making the announcement in a video on TikTok this morning, Prime Minister Keir Starmer sets out how the cap will save some families hundreds of pounds as the cost of living is the single most important issue across the country.
New leasehold flats will also be banned and homeownership strengthened thanks to groundbreaking legislation that will give people control over their homes and calls an end to the feudal leasehold system which dates to medieval times.
Over 5 million leaseholders and future homeowners will benefit from stronger control, powers and protections, through the draft Commonhold and Leasehold Reform Bill published today (Tuesday 27 January), which will fundamentally rewire homeownership across England and Wales.
It will cap ground rent at £250 a year before ultimately reducing it to a peppercorn after 40 years - marking the end of residential leaseholders paying over the top bills for no clear service in return.
This move will ensure leaseholders keep more of their hard-earned cash, with many seeing savings of over £4,000 over the course of their lease, improving cost of living for millions. This will also unlock house sales for leaseholders whose lives have been put on hold because of ground rent terms that make their homes hard to sell.
