The UK Government has announced a major change to the leasehold system that will have lasting benefits for homeowners across England and Wales. As part of sweeping reforms designed to modernise property ownership, ground rents for leasehold properties will now be capped at £250 per year – a move that could save thousands of pounds for millions of leaseholders.
This announcement, made on 27 January 2026 by Prime Minister Sir Keir Starmer, marks a significant shift in housing policy and fulfils a long-standing commitment to curb unfair ground rent practices that have burdened homeowners for decades. Under the proposals, existing ground rents above £250 will be reduced to this capped level, while in the longer term the rent will fall to a nominal “peppercorn” payment after 40 years.
For many leaseholders, this change brings welcome relief. Previously, escalating ground rents – often doubling every 10 or 25 years – have made properties harder to sell and remortgage, with some lenders refusing finance where ground rent terms are considered “onerous”. The new cap will help unlock stalled sales and improve confidence for buyers and sellers alike.
In addition to the cap, the reform package proposes to ban new leasehold flats and give existing leaseholders the right to convert to commonhold ownership, where homeowners collectively own and manage their building. These measures aim to strengthen the rights of homeowners and reduce the complexity and cost associated with leasehold ownership.
Understandably, the announcement has sparked debate within the property sector. Some freeholder groups and investors argue that the cap could impact investment confidence and lead to compensation claims. However, consumer advocates and housing campaigners have welcomed the changes as overdue and essential to tackling systemic issues within the leasehold system.
For anyone buying or selling a leasehold home in the current market, these reforms are a critical development to watch. At Cardwells Estate Agents Bolton and Cardwells Estate Agents Bury, our team is closely monitoring how these legal changes will affect property values, sales processes and mortgage affordability across the region. Whether you’re a first-time buyer, investor or downsizer, we’re here to help you navigate the transition with confidence.
To discuss how the ground rent cap might impact your property plans, get in touch with Cardwells Estate Agents Bolton or Cardwells Estate Agents Bury for expert advice tailored to your needs.
Cardwells Estate Agents Bolton and Cardwells Estate Agents Bury are available if you would like an up to date property valuation.
If you are considering selling a house in Bury be it through auction or traditional methods, letting a property in Bury or selling an commercial property in Bury for example, Cardwells Estate Agents Bury are your ideal starting point for all your residential and commercial property needs. Just call Cardwells Estate Agents Bury on 01617611215, email; [email protected] or visit www.Cardwells.co.uk
Cardwells are the market leading estate agents in Bolton and Bury and are here to work for you and get you the best possible price for your home.
Cardwells Estate Agents Bolton:
01204381281
[email protected]
www.Cardwells.co.uk
Cardwells Estate Agents Bury
01617611215
[email protected]
www.Cardwells.co.uk
