Summary
Ground rent is a periodic payment due under some residential leases. Current law in England and Wales restricts most new regulated long residential leases to a peppercorn ground rent, meaning no financial payment is due. The main commencement date for most new leases was 30 June 2022, with retirement home leases following from 1 April 2023.
Older leases can still contain ground rent unless changed through lease extension, variation or another legal process. There are also exceptions and special cases, so buyers should not rely only on the listing description. The lease and legal report must confirm the actual ground rent clause, review pattern and any escalation mechanism.
Definition
Ground rent is a rent payable by a leaseholder to the freeholder under the lease. For most new regulated long residential leases in England and Wales, the Leasehold Reform Ground Rent Act 2022 restricts ground rent to a peppercorn, but older leases and some exceptions may still involve payable ground rent.