Ground rents for leaseholders in England and Wales will be limited to £250 a year under wide‑ranging reforms unveiled by the Government.
The plans also include a ban on new leasehold flats and a new right for existing leaseholders to convert to commonhold, aimed at giving homeowners greater control over their buildings.
Announcing the changes in a TikTok video, Prime Minister Sir Keir Starmer said he had “spoken to so many people who say this will make a difference to them worth hundreds of pounds,” adding that easing pressure on household budgets remains crucial as the cost of living continues to dominate concerns nationwide.
The measures will be set out in the draft Leasehold and Commonhold Reform Bill, due to be introduced on Tuesday.
“It’s so important because the cost of living is the single most important thing in the country,” he added.
Secretary of State for Housing Steve Reed said: “If you own a flat you can be forced to pay ground rents that can become completely unaffordable.
“We said we’d be on the side of leaseholders – which is why today we are capping ground rent – helping millions of leaseholders by saving them money and giving them control over their home.
“The leasehold system has tainted the dream of home ownership for so many.
“We are taking action where others have failed –strengthening home ownership and calling time on leasehold for good.”
The Government has confirmed that the controversial practice of forfeiture, which allows landlords to seize a leaseholder’s home and wipe out their equity over debts as small as £350, will be scrapped under sweeping reforms to the leasehold system.
Ministers say a new enforcement regime will replace it, designed to “rebalance” the relationship between landlords and leaseholders and create a fairer system of redress.
Alongside this, a streamlined process for converting existing leasehold properties to commonhold will be introduced.
Under the revamped model, homeowners would gain a direct stake in the ownership of their building and stronger rights over how it is run, including control of management decisions and spending.
The Government says the strengthened commonhold framework will be suitable for all types of developments and meet the needs of mortgage lenders, with clearer rules on repairs, governance and homeowner protections.
Residents would have a formal say in annual budgets and day‑to‑day management, with new safeguards in place when disputes or failures arise.
Existing leaseholders will be able to switch to commonhold where a majority of occupants support the move.
The package builds on measures already being rolled out through the Leasehold and Freehold Reform Act 2024, including new requirements for transparent service‑charge information to help leaseholders hold landlords to account.
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