Government Announcement on Ground Rents – What It Means for Badbury Park Leaseholders

The Government has announced proposals to cap ground rents for existing leasehold properties in England and Wales at £250 per year, with a longer-term intention to reduce ground rents to a nominal “peppercorn” (effectively zero) after 40 years. These proposals form part of a draft Leasehold and Commonhold Reform Bill.

At this stage, this is a policy announcement, not new law.

The proposed changes have not yet been passed by Parliament and are not expected to come into force until around late 2028. Until then, there is no change to current legal rights or obligations for either leaseholders or freeholders. Existing leases at Badbury Park continue to operate strictly in accordance with their own terms, including any ground rent amounts and review provisions already set out in those leases.

The only current law in force is the Leasehold Reform (Ground Rent) Act 2022, which already prevents ground rent being charged on new residential leases. That law does not affect existing leases.

Once the proposed legislation becomes law, it is expected to introduce a maximum cap on ground rents rather than an automatic increase, but no changes apply until the legislation is formally enacted.

We will continue to monitor developments closely and will update leaseholders if and when the legal position changes.