The 2022 Act banned ground rents on new leases. The 2024 Act goes further. Learn what these reforms mean for your existing ground rent obligations and your extension premium.
The Leasehold Reform (Ground Rent) Act 2022 and the Leasehold and Freehold Reform Act 2024 have fundamentally transformed ground rent rules in England and Wales. However, neither Act retrospectively eliminates ground rent on existing leases — a critical point many leaseholders misunderstand.
Extending your lease under the statutory Section 42 route automatically converts your ground rent to peppercorn for the extended term. Eliminating an escalating future ground rent can be worth thousands of pounds — and is a major incentive to extend now.
Leases with doubling or RPI-linked ground rents create mortgage lender problems. Many lenders refuse mortgages on properties where ground rent exceeds 0.1% of property value or is structured to double. If you are on an escalating ground rent, extending your lease is urgent for mortgageability reasons as well as premium reasons.
The higher your current annual ground rent, the larger the ground rent capitalisation element of your premium. A property with £1,000/year ground rent will have a significantly higher premium than an identical property with £100/year ground rent, all else equal. Extending while your ground rent is still relatively low reduces your premium.
We'll email you when 2024 Act provisions come into force and when new premium rates are confirmed.
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Calculate Now →This article is for general information only and does not constitute legal or financial advice. Always consult a specialist solicitor and RICS surveyor before taking any action.
We'll notify you when 2024 Act provisions come into force, new rates are published, and when landmark Tribunal decisions affect your premium.