Leaseholders call for immediate £250 ground rent cap

A leasehold group is urging Prime Minister Andy Burnham to bring forward the £250 ground rent cap.

The National Leasehold Campaign (NLC) argues bringing in the cap now would help leaseholders with the cost of living by providing immediate savings for households facing ground rent costs.

The government has said it plans to cap ground rents by 2028 at the latest.

Leasehold is a cost-of-living crisis

The government has also announced plans for a plug-in solar initiative, which ministers say could save households up to £110 a year on energy bills.

The NLC welcomes the plans but argues bringing in a £250 ground rent cap would help leaseholders save more money, as the policy would provide immediate savings.

Katie Kendrick OBE, co-founder of the NLC, said “The Prime Minister has rightly recognised that leasehold is a cost-of-living crisis. The next step is delivering relief.  The Government is promoting potential savings from plug-in solar, but many leaseholders are still paying ground rents that ministers have already accepted have no place in modern Britain.

“For many households, an immediate £250 ground rent cap would save more than the annual savings currently being highlighted through plug-in solar. The difference is that those savings would be certain, direct and felt from the moment the policy takes effect.”

“Leaseholders have listened to promises of reform for more than a decade. They should not be expected to keep handing over money for absolutely nothing in return while waiting for a ground rent cap the government has already promised to deliver.”

Ground rent is an additional burden

In a letter to Mr Burnham, the NLC says ground rent is an additional burden for leaseholders and argues that reform is needed.

The letter says: “Leaseholders are already paying mortgages, service charges, insurance premiums and an ever-growing list of administration fees. Ground rent is simply an additional burden imposed on people who believed they were purchasing a home, not entering into a long-term income stream for a third party.

“The government’s delay means leaseholders will continue paying millions of pounds collectively in ground rents that Ministers have repeatedly acknowledged have no legitimate consumer purpose.

“An immediate cap on existing ground rents would provide direct financial relief to hundreds of thousands of households during a cost-of-living crisis. More importantly, it would send a clear signal that your government is prepared to act decisively for existing leaseholders rather than asking them to wait once again for promised reform.”

As previously reported by Property118, a report by the Housing, Communities and Local Government Committee has urged the government to implement the ground rent cap “without undue delay”.

Housing Minister Matthew Pennycook has previously said there were “a number of remaining policy choices that we need to work through” before decisions are made on how quickly changes can be implemented.