Ground Rent Reform
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What you need to know about the Ground Rent Act 2022
Since the initiation of the ground rent consultation on 9th November 2023 we have had to take a much more cautious approach when carrying out ground rent valuations as there is so much uncertainty in the ground rent market, with a reasonably low level of transactions. We have introduced a material valuation uncertainty clause in some of our ground rent valuations, although this insertion is decided on a case-by-case basis.
There have been various rumours including Michael Gove forcing to abandon his plans on reducing ground rents to a peppercorn after lobbying by investors and pension funds, but also other rumours about capping ground rents to £250 per annum and possibly phasing out ground rents for current leaseholders over a 20 year period. It is reported that the proposed changes may be added to the Leasehold and Freehold Reform Bill. At the moment it is a case of watching and waiting for a decision which could be made imminently.
If you want to find out more about what is happening to Ground Rents such as:
- How did we get to this point
- What did the consultation propose
- Allsop's view
Then please read our guide to What is happening to Ground Rents
For more insight on Ground Rents read our related article
What you need to know about the Ground Rent Act 2022 | Allsop
"A ‘ground rent’ is a rent that is usually paid annually by the leaseholder of a long lease to the landlord, typically the Freeholder. The Leasehold Reform (Ground Rent) Act 2022 prohibits ground rents to be anything above peppercorn on all new leases (unless exempt)."
If you are interested in knowing more about Ground Rent and how it relates to valuations then please get in touch with Emily.
Would you like some valuation advice?
We are here to help and if you would like to contact us regarding a valuation on your property or portfolio, please do not hesitate to get in touch with a member of the team. Alternatively you can complete our enquiry form below with your details and property information and one of our partners will contact you.