Leasehold Ground Rent Cap: What the Draft Bill Means for Homeowners

Jo Fleming, Head of Conveyancing at TMT Legal Services shares her thoughts on today's announcement.

The Government has recently unveiled some of the biggest changes to the leasehold system we’ve seen in decades, and these updates are set to affect millions of homeowners across England and Wales. With the draft Commonhold and Leasehold Reform Bill published on 27 January 2026, we now have a much clearer idea of what’s coming and what it could mean for buyers, sellers, and the whole property market.

One of the major changes is the introduction of a £250 annual cap on ground rent, which will drop to a peppercorn after 40 years. This is great news for leaseholders who’ve been dealing with rising and sometimes unpredictable charges. Ground rent has long been criticised and with some escalating clauses making properties hard to sell or re-mortgage, this cap is designed to finally tackle the current outdated system.

If all goes to plan in Parliament, the cap is expected to come into force in late 2028.

It’s fair to say this draft Bill marks a huge change in how homes are owned and managed across England and Wales. Even though some in the industry have voiced concerns, the overall direction is clear: the Government is pushing for a system that’s fairer, more transparent and far more empowering for homeowners.

For us as conveyancers, that means helping clients make sense of what these changes mean right now and what they could mean in the future. At TMT Legal Services, we’ll be keeping a close eye on how the Bill develops and making sure our clients stay fully up to date. If you’re unsure how these reforms might affect your property, lease or a planned purchase, our conveyancing team is always here to help. Contact our friendly Conveyancing teams based in Hythe, Chandler's Ford, Bitterne and Horsham to see how they can help you.