Question 1

What is ground rent, and what changed with leasehold reform?

Accepted Answer

**Ground rent** is a payment a leaseholder makes to the freeholder simply for the land the building stands on. Historically it was a token sum — a few pounds a year, sometimes a peppercorn — and it became a scandal when developers discovered it could be an income stream.

**What it is not.** Ground rent buys you **nothing**. It is distinct from the **service charge**, which pays for maintenance, insurance and management of the building, and from which you do at least receive something.

**How it became a problem.** New-build leases were sold, particularly from the 2000s onward, with ground rents that **doubled at fixed intervals** — commonly every ten or fifteen years. Compounding turns a modest starting figure into an enormous one over a long lease, and the freehold interest was then sold to investment companies.

The consequences were severe: **mortgage lenders refused** to lend on leases with escalating ground rents, so owners could not sell; buyers were trapped; and some houses, not just flats, were sold leasehold with no justification at all. Where ground rent exceeded a threshold, tenancies risked falling within assured tenancy rules, creating further complications.

**What has changed:**

**The Leasehold Reform (Ground Rent) Act 2022** restricts ground rent on most **new** long residential leases to a **peppercorn** — effectively zero. This deals with new leases and does nothing for existing ones.

**The Leasehold and Freehold Reform Act 2024** made further changes affecting enfranchisement and lease extension, including provisions relevant to ground rent treatment in premium calculations. **Implementation has been staged and some provisions require secondary legislation**, so check the current position rather than assuming a reform is in force.

**Voluntary remediation.** Following Competition and Markets Authority action, several major developers and freeholders agreed to remove doubling clauses from existing leases.

**If you are affected:** check your lease for the review mechanism and frequency; ask whether your developer participated in any CMA undertaking; consider a **lease extension**, which typically reduces ground rent to a peppercorn as part of the process; and take advice from a specialist solicitor.

General information, not legal advice.

Question 2

What is the difference between freehold and leasehold?

Accepted Answer

They are two fundamentally different things to own, and the distinction has more practical consequence than almost any other feature of a UK property. Freehold means you own the building and the land

Question 3

What is a lease extension, and what is marriage value?

Accepted Answer

A lease extension adds years to a leasehold term, and marriage value is an extra payment that becomes due once the lease is short — which is why extending early is dramatically cheaper than extending

Question 4

What are the rules on renting out a leasehold flat?

Accepted Answer

Renting out a flat you own leasehold is governed by your lease first, and the lease frequently restricts or conditions subletting in ways owners discover only when they try — or worse, after they

Question 5

What are the common mistakes to avoid when negotiating a lease agreement?

Accepted Answer

Avoid common mistakes in lease negotiations by reading the lease thoroughly, understanding total costs, and clarifying responsibilities. Take your time to negotiate favorable terms.

Question 6

How can a landlord actually increase the rent?

Accepted Answer

Only through a defined route, and which route applies depends on the type of tenancy and what the agreement says — a landlord simply announcing a higher figure does not make it payable. The available

Question 7

What is a park home, and what are the rules?

Accepted Answer

A factory-built residential unit sited on a licensed park, where you own the home and rent the pitch it stands on — a split that produces a legal position unlike either freehold or leasehold and that

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