Ground rent capped for leaseholders in England and Wales

Prime Minister Keir Starmer has announced a cap on ground rent to £250 for leaseholders in England and Wales on social media. 

The decision is part of a proposal from the government to ban leaseholds for new flats. This change would enable homeowners in Bournemouth to have greater control over their properties.  

The Prime Minister made the announcement on a TikTok video. He said the move would be a positive change for householders.

Starmer said: “Good news for homeowners, we are capping the rent at £250. That means if you are a leaseholder, and your ground rent is over £250, you will be paying less.” 

“I have spoken to so many people who say this will make a difference to them of hundreds of pounds. That is really important because the cost of living because the cost of living is the single most important thing across the country.” 

“This is a promise we said we would deliver and I am really pleased that we are delivering on that promise.” He added. 

The changes will be published in the draft leasehold and common hold reform bill, which will be introduced today. 

People in common hold modelled buildings will have a say in the annual budget and how the building is run. This includes new protections when things go wrong. 

A policy statement from the Ministry of Housing, Communities and Local Government said the new cap could help around 770,000 to 900,000 leaseholders save money during this Parliament. 

The housing secretary, Steve Reed said: “The leasehold system has tainted the dream of home ownership for so many. We are taking action where others have failed, strengthening home ownership and calling time on leasehold for good.” 

Alterations to ground rents will also offer a more modernised and efficient housing market, in addition to support the plan to end the feudal leasehold system. 

In contrast, a spokesperson for the Residential Freehold Association, the trade body representing professional freeholders said the rent cap could have an impact on the reputation of UK investors. 

They said: “The inclusion of a ground rent cap in the draft bill represents a wholly unjustified interference with existing property rights which if enacted, would seriously damage investor confidence in the UK housing market and send a dangerous and unprecedented signal to the wider institutional investment sector.”