England and Wales face mounting pressure to slash ground rents after a cross-party committee of MPs today demanded the government fast-track a £250 annual cap on leasehold payments. The call comes from the influential Housing, Communities and Local Government Committee, which warns that delays will leave millions of leaseholders trapped in spiralling costs with no immediate relief.
The committee, led by Labour MP Clive Betts, argues the current system allows freeholders to inflate rents arbitrarily, often by 10% or more annually. Betts labelled existing protections ‘laughably inadequate,’ citing cases where ground rents now exceed mortgage payments in some regions. The proposed cap, included in the forthcoming Leasehold Reform Bill, aims to freeze all new ground rents at £250 per year starting in April 2025, but MPs insist it must come sooner to prevent further financial harm.
Key Points
- ⚡ MPs demand the £250 annual ground rent cap be introduced immediately rather than waiting for 2025
- 💡 The cap applies to all new leasehold agreements in England and Wales
- ✅ Existing leaseholders currently have no protection from rent hikes
Evidence presented to the committee paints a stark picture. In Manchester, one leaseholder revealed their ground rent had surged from £200 in 2018 to £450 this year—more than doubling in five years. Another case in Bristol showed a rent increase from £150 to £380, leaving the homeowner unable to remortgage or sell. The committee heard that without urgent intervention, such trends will push thousands into negative equity or financial ruin.
| Region | Average Ground Rent (2018) | Average Ground Rent (2024) |
|---|---|---|
| London | £320 | £710 |
| South East | £280 | £630 |
| North West | £210 | £490 |
| West Midlands | £190 | £440 |
The government has defended its timeline, claiming the Leasehold Reform Bill already represents ‘the most significant reform in a generation.’ However, the committee’s report dismisses this as insufficient, noting that the bill’s gradual implementation—phased over two years—fails to address the immediate crisis. Freeholder groups argue the cap could destabilise property markets, but the committee counters that unchecked rent hikes already pose a greater risk to homeowners and lenders alike.
💡 Pro Tip
If you’re a leaseholder facing a ground rent hike, request a copy of your lease’s ‘escalation clause’—many freeholders exploit vague wording to justify excessive increases. Challenge any rise above RPI inflation (currently 3.8%) using the First-tier Tribunal’s leasehold valuation guide.
Among the committee’s sharpest criticisms is the lack of retrospective protection for existing leaseholders. Under current plans, only new leases issued after April 2025 will be subject to the £250 cap. MPs argue this leaves 2.1 million existing leaseholders vulnerable, with many trapped in contracts that allow rents to double every 10 years. The Law Commission has previously recommended retroactive application, but ministers have yet to act.
📋 By The Numbers
- 47% — Proportion of leaseholders in England who don’t know their ground rent is unregulated
- £1.2 billion — Estimated annual cost of ground rent hikes to homeowners since 2020
In a rare show of cross-party unity, the committee’s report was endorsed by Conservative MP Bob Blackman, who called the situation ‘a ticking time bomb’ for the housing market. ‘We’re sleepwalking into a crisis where ordinary people will lose their homes because they can’t afford to pay a rent that’s been artificially inflated,’ Blackman told the committee. The government has until December 2024 to respond to the report’s recommendations, but MPs warn that without swift legislative changes, the damage will be irreversible.
- Immediate freeze — MPs urge the government to apply the £250 cap to all leases from April 2025, not just new ones
- Retroactive relief — Existing leaseholders should be granted the same protections as new buyers
- Tribunal powers — Strengthen the First-tier Tribunal to block excessive rent increases
For leaseholders already struggling, the committee recommends seeking legal advice immediately. The government’s proposed Property Ombudsman for leasehold disputes is not expected to launch until 2026—too late for those facing imminent financial strain. Meanwhile, campaign groups like the National Leasehold Campaign have vowed to escalate protests if the government fails to act.