Ground Rent Scandals

Ground Rent Scandals: What You Need to Know

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    Ground rent is one of those housing costs that often goes unnoticed, like the distant rumble of thunder on a sunny day. However, in recent years, ground rent has taken centre stage in a series of housing scandals in the UK that have left homeowners thunderstruck. In this blog, we’ll delve into the ground rent scandal, what it is, and how it has impacted homeowners across the country.

    Understanding Ground Rent

    Before we dive into the scandal, let’s first understand what ground rent is. Ground rent is a fee paid by leaseholders to the freeholder of a property. It’s typically a relatively small annual fee, historically used as a way for freeholders to earn a passive income while allowing leaseholders to occupy the property.

    The Ground Rent Scandal Unveiled

    The ground rent scandal revolves around a significant shift in the way ground rents were structured for new leasehold properties, particularly for houses. In the past, ground rents were often set at a nominal amount, like £100 per year or even less. However, in some recent developments, ground rents were dramatically increased and designed to escalate significantly over time.

    The Impact on Homeowners

    • Financial Burden:

      Many homeowners found themselves burdened with high and rapidly increasing ground rent charges. For some, these charges escalated to the point where they became unaffordable, effectively trapping homeowners in properties they couldn’t sell or afford to maintain.

    • Difficulty Selling Properties:

      The scandal has made it incredibly challenging for homeowners to sell their properties. Prospective buyers are often deterred by the onerous ground rent terms, leading to a stagnant housing market.

    • Negative Equity:

      In some cases, the ground rent scandal has pushed homeowners into negative equity, where the value of their property falls below the amount they owe on their mortgage. This financial precariousness has left many families in dire straits.

    The Response from the Government

    Recognizing the gravity of the situation, the UK government has taken steps to address the ground rent scandal:

    • Ban on New Leasehold Houses:

      In January 2021, the government announced plans to ban the sale of new leasehold houses with onerous ground rent terms.

    • Ground Rent Reforms:

      The government has proposed reforms to ground rents on new leasehold flats. Ground rents for new leases will be set at zero, making them effectively free.

    • Leasehold Reform (Ground Rent) Act 2022:

      This act, which came into force in April 2023, restricts ground rents for new residential leases to a peppercorn (a nominal sum) for both houses and flats.

    Seeking Redress

    If you’ve been affected by the ground rent scandal, there are steps you can take:

    • Contact Your Freeholder:

      Try to engage with your freeholder and discuss the possibility of converting your lease to one with a nominal ground rent.

    • Legal Advice:

      Consult a property surveyor who specialises in leasehold issues to explore your legal options. You may be able to challenge unfair ground rent terms.

    • Government Schemes:

      Keep an eye on government schemes aimed at helping those impacted by the scandal. Some financial support may be available.


    The ground rent scandal has been a challenging chapter for many homeowners in the UK. However, with the government’s commitment to reforming ground rent terms and providing support, there is hope on the horizon for those affected. If you find yourself caught up in this scandal, don’t hesitate to seek professional advice and explore the available options to alleviate the financial burden and uncertainty it has caused.


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