Leaseholders have waited too long for successive governments to tackle this
For millions of homeowners in England and Wales, the act of owning a home has long carried a hidden obligation — ground rent paid to a freeholder, a feudal remnant that can double, compound, and ultimately render a property unsellable. Parliament has been promising to dismantle this system since 2017, and this week a cross-party committee of MPs urged the government to stop deliberating and act, pushing for a £250 annual cap to arrive in late 2027 rather than 2028. The story is not merely one of housing policy but of deferred lives — families unable to move, mortgages refused, futures held hostage by a legal architecture designed for another era.
- Ground rents that double at fixed intervals have quietly made thousands of homes unmortgageable, trapping leaseholders in properties they cannot sell and lives they cannot move forward with.
- A cross-party parliamentary committee, having heard from thousands of affected residents, has declared the government's proposed 2028 timeline unacceptably slow and is demanding the £250 cap arrive a full year earlier.
- The government's broader reform bill — which would also ban new leasehold flat sales and ease the path to commonhold ownership — is already showing signs of slippage, with the Housing Minister signalling the leasehold ban may not land until after the next election.
- Freeholder and investor lobbies warn that capping ground rents threatens pension funds and investor confidence, but MPs have countered that nine years of government signals have given the industry ample time to prepare.
- The committee is also pushing for an independent regulator to hold property management agents accountable for service charges that leaseholders say have spiralled without oversight or consequence.
For five million leaseholders in England and Wales, ground rent — a fee paid to a freeholder entirely separate from building maintenance — has become something closer to a financial trap. These charges have a habit of doubling at fixed intervals, and once they climb past certain thresholds, mortgage lenders walk away. Homes become unsellable. One leaseholder watched their flat become effectively worthless as the rent climbed past £500 a year. Another found themselves unable to move, unable to start a family, shut out by a mortgage market that had quietly closed its doors.
The government's draft Commonhold and Leasehold Reform Bill proposed capping ground rents at £250 annually — a meaningful ceiling, but one set to arrive no earlier than late 2028. A cross-party committee of MPs, having gathered testimony from thousands of affected residents, published a report this week calling that timeline too slow. Governments have been promising leasehold reform since at least 2017, the committee noted. Leaseholders have waited long enough. The committee is urging the cap be brought forward to late 2027, and that the proposed 40-year transition to peppercorn — effectively zero — rents be compressed to 20 years.
The ground rent cap sits within a larger ambition. The bill would also ban the sale of new leasehold flats and make it easier for residents to convert to commonhold, a system where building owners collectively hold and manage their properties without an expiring lease overhead. But Housing Minister Matthew Pennycook has already indicated the ban on new leasehold sales is unlikely to take effect before the next election, citing the logistical complexity of standing up millions of commonhold associations overnight and the disruption it would send through the mortgage market.
The Residential Freehold Association has argued that capping ground rents threatens investor confidence and puts pension funds that rely on ground rent income at risk. The committee was unmoved, pointing out that the industry has had nearly a decade of warning. Labour's 2024 manifesto promised to end the feudal leasehold system entirely. Committee chair Florence Eshalomi has called on the government to bring revised legislation to Parliament this autumn, with the aim of it becoming law by mid-2027 — and to establish an independent regulator to bring accountability to property management agents whose service charges leaseholders say have risen without limit or scrutiny.
What the committee's report ultimately describes is a system that has served freeholders and investors well while quietly cornering ordinary homeowners. The government insists reform is coming. The question is whether it arrives at the pace MPs are demanding, or whether leaseholders find themselves, once again, waiting.
For five million people in England and Wales who own leasehold homes, the annual ground rent they pay to their freeholder has become a trap with teeth. These fees—separate from the maintenance charges that keep buildings standing—have a habit of doubling at fixed intervals or rising with inflation, turning what seemed like a manageable cost into something that can render a property impossible to sell or mortgage. One leaseholder watched their flat become "effectively worthless" as the ground rent climbed past £500 a year and kept climbing. Another found themselves unable to move, unable to start a family, unable to do much of anything because the mortgage market had shut them out.
The government promised to fix this. In its draft Commonhold and Leasehold Reform Bill, it proposed capping ground rents at £250 a year—a ceiling that would finally give leaseholders some breathing room. But the timeline was glacial: late 2028 at the earliest. A cross-party committee of MPs, having heard from thousands of leaseholders describing their homes as unmortgageable and unsaleable, decided that was too slow. In a report published this week, they urged the government to accelerate the cap to late 2027 instead, arguing that successive governments have been promising to tackle the leasehold system since at least 2017. Leaseholders, the committee said plainly, have waited too long.
The ground rent cap is only one piece of a larger overhaul. The bill would also ban the sale of new leasehold flats and make it easier for people to convert to commonhold—a system where residents jointly own and maintain their buildings without an expiring lease hanging over them like a sword. The government has committed to dismantling the feudal leasehold system by the end of Parliament, which could run until 2029. But Housing Minister Matthew Pennycook has already signaled that the ban on new leasehold sales is unlikely to take effect until after the next election, a delay he justified by pointing to the logistical chaos of instantly establishing millions of commonhold associations and the shock it would send through the mortgage market.
The committee's frustration is visible in the fine print. It questioned why the government's proposed 40-year transition to peppercorn rates—effectively zero rent—could not be compressed to 20 years. The Residential Freehold Association, which represents professional freeholders, has warned that capping ground rents threatens the UK's reputation with investors and jeopardizes pension funds that rely on ground rent income. But the committee was unmoved. Freeholders and investors have had years to prepare, it noted. The government itself has been signaling this change since 2017. The argument that they need more time rings hollow.
Labour's 2024 election manifesto promised to end the "feudal leasehold system" once and for all. Florence Eshalomi, the Labour MP who chairs the committee, has called on the government to recognize the urgency and bring revised legislation to Parliament in autumn so it can become law by mid-2027. The committee has also recommended establishing an independent regulator to police property management agents, many of whom leaseholders say have imposed spiraling service charges with no accountability.
What emerges from the committee's report is a picture of a system that has worked perfectly for freeholders and investors but has trapped ordinary homeowners in a maze of escalating costs and shrinking options. The government says it is committed to reform. The question now is whether it will move at the speed the MPs are demanding, or whether leaseholders will spend another year or two waiting for a government that has been promising change since before the current Parliament began.
Citas Notables
Leaseholders have been waiting for too long for successive governments to tackle the unfair leasehold system. It is vital the government now recognises this urgency.— Florence Eshalomi, Labour MP and committee chair
The government is still committed to dismantling the leasehold system by the end of the Parliament, by empowering leaseholders to take control of their buildings.— Housing Minister Matthew Pennycook
La Conversación del Hearth Otra perspectiva de la historia
Why does ground rent matter so much? It's just a fee, isn't it?
It's a fee that can double every ten or twenty years. Imagine you buy a flat for £300,000 and the ground rent is £100 a year. In fifteen years it could be £200. In thirty it could be £400. At some point, no mortgage lender will touch it. The property becomes unsaleable.
So people are trapped in their homes?
Worse than that. They can't move. They can't upgrade. One person told the committee their flat was unmortgageable and unsaleable because of the ground rent. They couldn't afford a second mortgage, so they had to delay starting a family.
Why hasn't this been fixed already?
Governments have been promising to fix it since 2017. That's nine years of promises. The committee is essentially saying: enough. Leaseholders have waited long enough.
What's the government's excuse for the delay?
They say they're bringing it as an urgent priority. But their timeline has the cap coming in late 2028. The committee wants it in late 2027. And the transition to zero rent? The government says 40 years. The committee asked why it couldn't be 20.
Who's resisting the change?
Freeholders and investors who profit from ground rents. Pension funds too—they invest in ground rent income. They argue they need time to adjust. The committee essentially said: you've had since 2017.
Will the government listen?
That's the real question. Labour promised in its manifesto to end the leasehold system. The committee is calling their bluff.