By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards


Rip-Off leasehold charges to be abolished by government

Millions of leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent, the Housing Secretary Robert  Jenrick has announced.

Under the current law freeholders can increase the amount of ground rent with little or no benefit seen to those faced with extra charges.

Today’s changes will mean that any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder, enabling those who dream of fully owning their home to do so without cumbersome bureaucracy and additional, unnecessary and unfair expenses


For some leaseholders, these changes could save them thousands, to tens of thousands of pounds says the government.

Under current rules, leaseholders of houses can only extend their lease once for 50 years with a ground rent. This compares to leaseholders of flats who can extend as often as they wish at a zero ‘peppercorn’ ground rent for 90 years. 

Today’s changes mean both house and flat leaseholders will now be able to extend their lease to a new standard 990 years with a ground rent at zero.

A cap will also be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder.  

An online calculator will be introduced to make it simpler for leaseholders to find out how much it will cost them to buy their freehold or extend their lease.

The government is abolishing prohibitive costs like ‘marriage value’ and set the calculation rates to ensure this is fairer, cheaper and more transparent. An online calculator will be introduced to make it simpler for leaseholders to find out how much it will cost them to buy their freehold or extend their lease.

The government has previously committed to restricting ground rents to zero for new leases to make the process fairer for leaseholders. 

This will also now apply to retirement leasehold properties - homes built specifically for older people - so purchasers of these homes have the same rights as other homeowners and are protected from uncertain and so-called rip-off practices.

Housing  Secretary  Robert  Jenrick says :“Across the country people are struggling to realise the dream of owning their own home but find the reality of being a leaseholder far too bureaucratic, burdensome and expensive.

“We want to reinforce the security that home ownership brings by changing forever the way we own homes and end some of the worst practices faced by homeowners.

"These reforms provide fairness for 4.5 million leaseholders and chart a course to a new system altogether.”

Mark Hayward, Propertymark’s chief policy adviser, says: “We have campaigned for years for changes to the leasehold system and event fees on retirement homes. The issue of escalating ground rent on leasehold homes has been a long term scandal which has left many owners trapped and unable to sell their houses. 

“Our research in 2018 found that 46 per cent of leasehold house owners were unaware of the escalating ground rent when they purchased their property. 

“Over one million households in the UK are sold through a leasehold, and this new legislation will go a long way to help thousands of homeowners caught in a leasehold trap. 

"However, while we welcome the government’s initiative to reduce ground rents to zero for all new retirement properties, we would argue this needs to be extended to all retirement properties to create a level playing field. Event fees remain a hugely contentious issue which many consumers still don’t understand so we need as much clarity and transparency as possible.”

  • Stephen Hayter

    I very much look forward to seeing the devilish detail. However, this is very good news indeed for many millions of homeowners.

  • icon

    If developers and freeholders had offered 999 year leases in the first place this wouldn't be needed. So many new flats in my patch are/were sold with miserly 99 year leases and a £500 p.a ground - what a rip off. .

  • Richard Copus

    Does shared ownership benefit from this change?


    Owners of shared ownership properties don't currently have a statutory right to extend their lease and it doesn't seem to be proposed, from today's announcement, that they are to be granted one. Without this, changes to the statutory lease extension legislation will not impact them.

  • Simon Stone

    Long overdue. Developers and freeholders have got away with abuse of buyers and leaseholders without adequate intervention. We ought to see reform of escalating rents being charged which may create assured shortholds too.

  • icon

    We are marketing a flat here in north London, with an outrageous ground rent of £750 per annum and a service charge of £3,3800. The property was bought as a new build a few years ago with a 125 year lease. I am astonished as to how these charges are legal. In addition, what solicitor in their right mind would not red flag these numbers to their client. It beggars belief!


Please login to comment

MovePal MovePal MovePal
sign up