High ground rent in leasehold flats and your options

High or escalating ground rent can make a flat difficult to sell or remortgage. Some leases include clauses that double the rent every few years or adjust it to inflation, leaving leaseholders with rising costs and reduced property value. While ground rent has been abolished for new leases, many existing leaseholders are still affected.

If high ground rent is affecting the value or saleability of your flat, early advice can help clarify whether options such as a lease extension or collective enfranchisement are available.

The current position

Ground rent reform has changed the position for new leases, but many existing leaseholders remain bound by older terms.

• Since June 2022, new long leases cannot include ground rent; they must be peppercorn (zero). Retirement leases were included from April 2023.
   
• Existing leases are not covered by this ban. Leaseholders with older leases may still face doubling or inflation-linked ground rents.
   
• The Competition and Markets Authority has criticised ground rent as “not legally or commercially necessary”, but at present, no legislation has capped or removed ground rent on existing leases. Consultations on reform continue.

Your legal options explained

The right approach will depend on the wording of your lease, the level of ground rent, and your longer-term plans for the property.

1. Check your lease and rent demands
   
   Understanding the terms of your lease is the starting point. The wording will set out how and when your ground rent increases. Importantly, a landlord must serve a formal notice in the prescribed format before ground rent is payable – if this is not done, the demand may be invalid. Reviewing these details with a solicitor can sometimes identify errors or opportunities to challenge the rent.
    
2. Negotiate with your freeholder
   
   If a high ground rent is affecting the saleability or remortgage of your flat, some freeholders will agree to vary the lease. This may involve a one-off payment to reduce or fix the rent at a lower level. Negotiations can be unpredictable, but having professional advice and valuation input will strengthen your position and help avoid unfavourable terms.
    
3. Extend your lease
   
   A statutory lease extension reduces ground rent to a peppercorn for the extended term. This makes the property more attractive to buyers and lenders, and often represents the most straightforward way to remove high or escalating rent. Although the process involves a premium and legal costs, it permanently resolves the issue of ground rent and secures the flat's long-term value.
    
4. Buy the freehold
   
   Through collective enfranchisement, leaseholders can come together to buy the freehold of their building. Once the freehold is acquired, the leaseholders will be able to grant themselves deeds of variation or lease extension deeds to remove the ground rent. While this option can be complex and requires cooperation among multiple leaseholders, it gives long-term control over the building and eliminates rent altogether.
    
5. Follow reforms
   
   The government has indicated an intention to introduce further leasehold reform, including proposals to cap existing ground rents and tighten rules on insurance commissions. However, these measures have not yet been implemented. While reforms may eventually reduce costs, they are not guaranteed and may take years to come into effect. Planning on the basis of current law is usually safer than waiting.

Risks of inaction

It is important to address high ground rent sooner rather than later. Leaving the problem unresolved can have serious financial and legal consequences:

• Properties with high or doubling ground rents may become unmortgageable.
   
• Onerous rent terms can reduce sale prices and deter potential buyers.
   
• Falling into arrears can allow a landlord to begin forfeiture proceedings, putting ownership at risk.

Contact our leasehold solicitors

High or escalating ground rent can have a lasting impact on a flat’s value, mortgageability, and long-term security. Taking advice early can help identify whether a lease extension, negotiated variation, or collective enfranchisement is the most effective solution under the current law.

Our leasehold and enfranchisement solicitors advise leaseholders across London and nationwide on ground rent issues, lease extensions, and freehold purchases. We work closely with valuers and managing agents to provide clear, practical advice at every stage.

Get in touch to speak with our leasehold solicitors.