By Isle of Wight Observer
Leasehold reforms are back in the headlines, and one of the most topical issues is the Government’s plan to overhaul ground rent payments for hundreds of thousands of residential leaseholders in England and Wales.
On 27 January 2026, the Government published a draft Commonhold and Leasehold Reform Bill for prelegislative consideration, alongside explanatory material including a policy statement on ground rent and a consultation on moving to commonhold and restricting the creation of new leasehold flats.
At this stage, the proposals are not law. They indicate an intention for future reform, but they do not change the legal position today.
The proposals currently attracting the greatest attention are those relating to ground rent in existing residential leases, which has long been a source of frustration, complexity, and expense for many flat owners.
Ground rent is a charge paid by a leaseholder to the freeholder or landlord for the right to occupy the property. Unlike service charges or maintenance contributions, ground rent is not linked to the provision of services and can therefore feel like a charge for nothing. Mortgage lenders and valuers often treat ground rent as problematic where the terms of the lease are unfavourable.
If enacted in their current form, the proposals would:
• cap high existing ground rents at £250 per year
• ultimately remove ground rent by reducing it to a peppercorn after a transition period; and
• potentially improve the mortgageability and saleability of affected flats.
However, until the legislation is in force:
• your ground rent remains payable;
• your lease terms do not change; and
• the final form and timing of reform remain uncertain.
Many leaseholders are asking if they should wait before extending their lease or buying the freehold, and, whilst the answer in most cases will be probably not, this will depend on individual circumstances and specialist advice should be taken before making any decision.
If you would like assistance from one of our leasehold specialists at Biscoes Solicitors, please contact us on 01983 533938 or through our website at biscoesiow.co.uk.