Ground Rent to be banned for new leases from 30 June

Mark Chick, Senior Partner and Head of Bishop & Sewell’s Landlord & Tenant team.

So, we were all wondering when the Leasehold Reform (Ground Rent) Act 2022 banning ground rent for new leases would come into force and now we have the answer. The new Act will come into force on 30 June, writes Mark Chick, Senior Partner and Head of the Landlord and Tenant team at solicitors Bishop & Sewell.

The 2022 Act prevents any new lease granted after 30th June 2022 containing a ground rent. The only acceptable rent after this date will be a peppercorn – I.e. zero, nothing, nil.

The only exception to this will be that if a lease is renewed on a voluntary (agreed) basis that the existing ground rent may continue during what would have been the term of the old lease. In the ‘new’ or extended part of the lease term the ground rent must be zero.

Leases granted after 30th June 2022 that breach these provisions will expose the person granting them to penalties and fines of between £500 and £30,000 will be enforced by a civil penalty regime.

Any rent paid in error after commencement must be returned with interest and there are anti-avoidance provisions in the Act preventing freeholders form charging an administration fee to collect a ‘peppercorn’ ground rent.

There are some very limited exceptions which relate to community housing, business leases, certain types of financial products and shared ownership. In addition, commencement is delayed until a date which will not be before 1st April 2023 for the retirement sector.

The writing is therefore very much on the wall for ground rent.

For further information, click here. You can find our updated note on the Act here.

To get in contact with Mark Chick or a member of the Leasehold team at Bishop & Sewell to discuss any related issues, then please quote reference CB304 and email: [email protected] or call: 0207 631 4141 and ask to speak to a member of the Landlord and Tenant team.

About Bishop & Sewell LLP
Bishop & Sewell is a long-established, full service Central London law firm – with an international reach – specialising in Personal, Property and Commercial legal matters. To learn more, visit