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Ground rent and peppercorn rent explained

Ground rent explained: what it is, what a peppercorn rent means, the 30 June 2022 rule on new leases, and what it means if you are selling a leasehold flat.

4 min read
Last reviewed 31 October 2026
By Your Property Check team

Part 1 of 9

What ground rent is

Ground rent is a payment to your landlord that might be included in your lease. GOV.UK says it does not have to buy you any service in return. That sets it apart from the service charge, which pays for running and maintaining the building. A leaseholder can owe both, or neither, depending on the lease. Our glossary entry on ground rent gives the short definition. We read the GOV.UK page on 31 October 2026.

Part 2 of 9

What peppercorn rent means

A peppercorn rent is a rent worth zero. GOV.UK says that for leases granted on or after 30 June 2022 you usually cannot be charged more than a peppercorn ground rent, and that it still forms a binding contract with your landlord. See the glossary entry on peppercorn rent. Peppercorn rent is not the same as having no landlord, and it does not change the fact that the property is leasehold.

Part 3 of 9

The 2022 change, and what it does not do

The change applies only to leases granted on or after 30 June 2022. GOV.UK says that if you buy an older lease from another leaseholder after that date, you still pay any ground rent written into your lease. The 2022 rules did not remove ground rent from existing leases.

Part 4 of 9

If your lease was granted before 30 June 2022

GOV.UK sets out these points:

You do not have to pay ground rent unless your landlord has sent you a formal, written demand for it. Once you have a demand, the landlord can take legal action if you do not pay.
Landlords can recover unpaid ground rent for up to 6 years and can ask for the whole amount at once.
The rent can only go up if you agree or the lease allows it. Read the lease for any rent review clause, because some set the rent to rise over time.

If you get a demand, check who sent it and that it is formal and in writing. A leasehold solicitor can confirm whether it is valid.

Part 5 of 9

The government's plan to cap ground rent

On 27 January 2026 the government announced a plan to cap ground rent at 250 pounds a year, and to reduce it to a peppercorn after 40 years, for older long residential leases. It came with a draft Commonhold and Leasehold Reform Bill. The government said the cap could come into force in late 2028, subject to parliamentary timings. As of our last check on 30 October 2026 this was a plan and not law. We did not manage to re-read the announcement on 31 October, so treat the wording as a summary and check GOV.UK. Do not advertise a cap or reduction as certain until it is law.

Part 6 of 9

What it means when you sell a leasehold flat

Ground rent is a normal part of a flat sale, and the buyer's side will ask about it.

Receipts and demands. A buyer's solicitor will ask for proof that ground rent has been paid and for the current demand. Keep every receipt and demand together before you list.
Escalating rents. A lease where the rent rises can put off buyers and lenders, and a lender may object to the terms. Ask your solicitor whether it is worth talking to the freeholder before you list.
Unpaid sums. Because unpaid rent can be recovered for up to 6 years, clear any arrears or agree them in writing, so they do not hold up the sale.
The wider pack. Ground rent sits beside the service charge, the lease length and, for some blocks, cladding checks. Our article on the EWS1 form when selling a flat covers the last of these. To confirm what you own, see how to check if a house is freehold or leasehold.

Part 7 of 9

A short checklist before you list

Find your lease and note the date it was granted, because that decides whether the 30 June 2022 rule applies.
Read the ground rent clause and any rent review wording, and write down the current amount.
Gather every demand and receipt you have, and note who sent each one.
Ask your landlord or managing agent for a statement of what you owe, if anything.
Tell your solicitor early, so replies to the buyer's questions are ready when an offer arrives.

Doing this first stops the questions arriving mid-sale, when delay is most costly. It also helps you decide whether the lease terms mean you should price the flat with a buyer's questions in mind. Our free house valuation gives a range from HM Land Registry sold prices to price against.

Part 8 of 9

Buying a leasehold home

If you are on the buying side, ask your solicitor three questions: what is the ground rent, does it rise, and what does the lease say about demands. Check when the lease was granted, because that decides which rules apply.

Part 9 of 9

Where to get help

Your conveyancer or a leasehold solicitor can read the lease and tell you what applies. This page is general information for England, not legal advice, and the rules for leases differ in other parts of the UK.

Our take

Sort the ground rent paperwork before you list

Ground rent is rarely the biggest cost on a flat, but it is a common source of delay. The date your lease was granted decides whether the 30 June 2022 rule applies, and a buyer's solicitor will ask for receipts and demands. We think sellers should gather them before listing.

Pricing the flat realistically is the next step. Our free house valuation gives an honest value range from real HM Land Registry sold prices in your postcode, with the comparable sales and working shown, so you can set your price with a buyer's questions in mind.

Check my value

Our opinion, drawn from the facts on this page: not advice and not a forecast. We earn from OfferCheck reports and from introducing sellers to cash buyers, so weigh it with that in mind (see our disclosure). We are not authorised or regulated by the FCA.

Questions, answered

Frequently asked questions

What is ground rent?

Ground rent is a payment to your landlord that might be included in your lease. GOV.UK says it does not have to buy you any service in return. It is separate from service charge, which pays for running the building.

What is a peppercorn rent?

A peppercorn rent is a ground rent worth zero. GOV.UK says leases granted on or after 30 June 2022 usually cannot charge more than a peppercorn, and that it still forms a binding contract with your landlord.

Do I have to pay ground rent?

On leases granted before 30 June 2022, GOV.UK says you do not have to pay unless your landlord has sent a formal, written demand. Landlords can recover unpaid ground rent for up to 6 years. Check your own lease with a solicitor.

Can ground rent increase?

On older leases, GOV.UK says the rent can only go up if you agree or the lease allows it. Read the lease for a rent review clause. Escalating ground rent can make a flat harder to sell, so tell your solicitor early.

Is ground rent being capped or abolished?

The government announced a plan on 27 January 2026 to cap ground rent for older long residential leases. As of 30 October 2026 it was a plan and not law, so do not rely on it until it becomes law.

Where this comes from

Sources

Last reviewed 31 October 2026 by the Your Property Check team. This page is general information, not legal, tax or financial advice. For your own situation, speak to a conveyancing solicitor or another qualified professional.