Ground rent on new leases is now zero

On new long residential leases, ground rent can no longer be charged. That is the effect of the Leasehold Reform (Ground Rent) Act 2022.

What ground rent is

Ground rent is an annual payment a leaseholder made to the building's freeholder simply for the land, with no service in return. In older leases it sometimes rose and became a burden when selling the flat.

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The core rule

For a 'regulated lease' the permitted rent is now a peppercorn rent — an annual rent of one peppercorn (s4). In practice that means a zero money ground rent: no real money can be required as ground rent on these leases.

Which leases it covers

The law applies to new long residential leases granted for a premium after the Act came into force in 2022. If you are signing a new flat lease, it should carry no money ground rent.

What it does NOT change

It does not automatically remove ground rent from existing older leases — there the rent stays as the contract provides, and reducing it is dealt with by separate leasehold reforms. It also does not affect ordinary rent for a tenancy or the building's service charge — those are different payments.

What to check before signing

1. Make sure a new lease states ground rent as a peppercorn (zero), not a money sum.
2. Check the service charge and other fees separately — this law does not cap them.
3. Take any doubts to an independent property solicitor before signing.

Source: section 4 of the Leasehold Reform (Ground Rent) Act 2022. Checked 25 October 2026.