Ground Rent Reform

What the £250 Cap Means for Leaseholders and Investors

Last year, the Government signalled its intention to reform the leasehold system as part of its wider housing and cost-of-living agenda. In January 2026, that intention took a concrete step forward.

On 27 January 2026, the Government published the draft Commonhold and Leasehold Reform Bill (the Bill) for pre-legislative scrutiny, describing it as a key measure in its manifesto commitment to bring the “feudal leasehold system to an end” in England and Wales.

A central feature of the Bill is the reform of ground rent payable under existing long residential leases.

 

What is changing: the £250 ground rent cap

Under the proposals:

  • Ground rents on existing long residential leases will be capped at £250 per annum
  • The cap will apply for a 40-year transitional period
  • After 40 years, ground rent will be reduced to a peppercorn (effectively £0)

This reform extends the protections introduced by the Leasehold Reform (Ground Rent) Act 2022, which abolished ground rents for most new residential leases, to leases granted before 2022.

The stated policy objective is to end leaseholders paying “over-the-top bills for no clear service in return”, while addressing the saleability and mortgage ability issues associated with escalating or uncapped ground rent clauses.

The Government estimates that some leaseholders could save more thousands over the life of their lease, and that the reform will help unlock stalled property sales where ground rent terms have made homes difficult to sell or refinance.

 

Why the ground rent cap is significant

Ground rent has long been a routine feature of residential leases, often payable without any corresponding service and, in some cases, subject to escalating clauses that significantly increase costs over time.

By introducing a statutory cap and a long-term transition to a peppercorn rent, the proposed reform marks a clear shift in how ground rent is treated within the leasehold system. It is intended to reduce financial pressure on leaseholders while addressing wider market issues, including saleability and mortgage lender concerns, by improving certainty and confidence in the residential property market.

Ground rent reform is also intended to address market dysfunction, particularly:

  • Flats rendered unsellable due to onerous ground rent clauses
  • Mortgage lender reluctance to lend on leases with escalating rents
  • Leaseholders trapped in properties with diminishing marketability

 

How we can help

Chan Neill Solicitors LLP has an experienced residential conveyancing team advising on both leasehold and freehold transactions. We regularly assist clients in navigating regulatory change and its practical impact on property transactions and investment decisions.

What’s next?

In our next article, we will look beyond ground rent and explore other proposed reforms under the Renters’ Rights Act 2025, examining how they may affect landlords, tenants, and the residential property market more broadly.

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Litigation Essay Competition 2026

 

Here at Chan Neill Solicitors, we are committed to delivering high-quality legal expertise, providing client-focused services tailored to businesses and individuals alike. We pride ourselves on providing strategic guidance and well-considered advice whilst protecting our clients’ interests. Our team of skilled legal professionals strive to become their clients’ trusted advisors in all aspects of their clients lives and businesses, working to help clients navigate complex legal challenges, fostering trust and long-term relationships.  

We are, therefore, pleased to announce our inaugural Litigation Essay Competition! We are looking to foster debate, critical thinking, and practical writing abilities in law students and legal professionals at the very start of their career. Entries will be judged on the quality of their legal research, understanding of statute and case-law, and their ability to set out and defend it.

Please select from one of the following questions:

  1. Part 36 offers of settlement serve the purpose of ensuring parties to litigation seriously consider settlement. However, to what extent can Part 36 settlement offers be strategically misused and/or abused, and how?
  2. The use of AI has become increasingly common in everyday life. To what extent should litigants make use of AI, and what are the potential pitfalls of doing so?
  3. The “Mazur decision” has sent shockwaves throughout the litigation market. What areas within the litigation sphere have been most impacted, and what steps should be taken to ensure compliance?
  4. “Ignorance is not a defence”. To what extent does this fundamental legal principle still hold true?

This opportunity is open to undergraduates, post and recent graduates without a training contract or pupillage.

In addition to your essay submission, please write 50 words outlining what stage you are at in your studies and that you do not yet have a pupillage or training contract. Please also confirm that you have not used Artificial Intelligence.

Rules

  • Essays must be no more than 1,500 words (excluding footnotes).
  • Answers should be sent to tboyton@cnsolicitors.com in Microsoft Word format. The covering email should state the entrant’s full name, present (or most recent) university/college and contact details (judging is anonymous). All submissions will be acknowledged.
  • Any submissions found to be AI led will be immediately disqualified
  • This opportunity is open exclusively to those in the UK.
  • The deadline to submit is Monday, 2nd March 2026

Each essay is judged against the following criteria:

1. Legal and case analysis;

2. Structure; and

3. Legal writing style.

HOW THE COMPETITION IS JUDGED
Essays are judged in two stages:

  • In the first instance, members of the Litigation Team will review all entries to select a shortlist.
  • At the second stage, the prize-winners are decided by the Head of Litigation.

REWARD

The top prizes for the competition are as follows: 

Winner – Two week Vacation Scheme and a 1-1 discussion on work with Litigation Head ·        

Runner Up – One week Vacation Scheme

The winning essays will also be published on the Chan Neill Solicitors LLP website.

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