The National Leasehold Campaign (NLC) has called on the Prime Minister to accelerate the implementation of a promised £250 ground rent cap, arguing it would provide immediate financial relief to leaseholders facing cost-of-living pressures.
The campaign, representing more than 35,000 leaseholders, sent a letter last week urging the government to prioritise the reform following Prime Minister Andy Burnham’s acknowledgement during his parliamentary debut that leasehold reform represents a cost-of-living issue.
Comparative savings analysis
The NLC argues that many households would benefit more from an immediate ground rent cap than from the government’s recently-announced plug-in solar initiative. Ministers have stated households could save up to £110 annually on energy bills through plug-in solar panels, though this requires upfront setup costs. In contrast, typical ground rent costs average around £300 per year.
Katie Kendrick, Co-Founder of the NLC, said: “The Prime Minister has rightly recognised that leasehold is a cost-of-living crisis. The next step is delivering relief. The Government is promoting potential savings from plug-in solar, but many leaseholders are still paying ground rents that ministers have already accepted have no place in modern Britain.”
Market implications
The proposed cap could have significant implications for the property market, particularly affecting the valuation of leasehold properties and the business models of freeholders who derive income from ground rents. The measure would provide certainty to leaseholders, though the timeline for implementation remains unclear. The issue adds to broader challenges facing the UK housebuilding sector, which has seen formations fall to their lowest level since 2022.
Kendrick added: “For many households, an immediate £250 ground rent cap would save more than the annual savings currently being highlighted through plug-in solar. The difference is that those savings would be certain, direct and felt from the moment the policy takes effect.”
The campaign emphasised that leaseholders have been waiting for reform for more than a decade, with Kendrick stating: “They should not be expected to keep handing over money for absolutely nothing in return while waiting for a ground rent cap the Government has already promised to deliver.”
The government has signalled that housing reform will be among its priorities, though no specific timeline has been provided for implementing the ground rent cap.
