Sir Keir Starmer makes announcement on leasehold reforms on TikTok as party tensions rise over delays.
27th Jan 20263 2,611 3 minutes read Simon Cairnes
Ground rents for leaseholders in England and Wales will be capped at £250 a year under a “game-changing” overhaul of the leasehold system, with Keir Starmer moving to deliver long-promised reforms after growing pressure from Labour MPs to show tangible progress.
Starmer announced the cap in a video posted on TikTok – the first time a UK prime minister has used the platform to unveil a major government policy.
“Good news for homeowners, we’re capping ground rent at £250,” he said. “That means if you are a leaseholder, and your ground rent is more than £250, you’ll be paying less.
I’ve spoken to so many people who say this will make a difference to them of hundreds of pounds.”
“And I’ve spoken to so many people who say this will make a difference to them of hundreds of pounds. That’s really important because the cost of living is the single most important thing across the country.
“So this is a promise that we said we’d deliver, and I’m really pleased that we’re delivering on that promise.”
The cap is part of the draft Commonhold and Leasehold Reform Bill published by the Ministry of Housing, Communities and Local Government, which ministers say will “fundamentally rewire” home ownership across England and Wales.
Reducing to peppercornGround rents will be capped at £250 before ultimately reducing to a peppercorn after 40 years, ending what the department describes as “over the top bills for no clear service in return”.
Steven Reed, Housing Secretary
Housing secretary Steve Reed said: “If you own a flat, you can be forced to pay ground rents that can become completely unaffordable. We said we’d be on the side of leaseholders, which is why today we are capping ground rent – helping millions of leaseholders by saving them money and giving them control over their home.
“The leasehold system has tainted the dream of home ownership for so many. We are taking action where others have failed – strengthening home ownership and calling time on leasehold for good.”
Ministers insist the ground rent cap is only the first visible step, with further leasehold reforms – including changes to commonhold and forfeiture – expected to follow in stages over the rest of this Parliament.
Industry reacts“Ground rent has been a persistent friction point for buyers.”
Becky Fatemi, Executive Partner, Sotheby’s International Realty
Becky Fatemi, Executive Partner at Sotheby’s International Realty UK, comments: “Ground rent was introduced centuries ago as part of a feudal system, and in a modern housing market it has long since outlived its purpose. This is a genuinely sensible move and one the market has needed for a long time.
“Ground rent has been a persistent friction point for buyers, particularly international ones, who simply don’t understand why they are paying an ongoing charge for the ground beneath their own home.
transparency and consistency“A clear cap brings transparency and consistency, which are critical in a market where confidence has been fragile. It also helps correct the imbalance between newer homes with no ground rent and older flats that have unfairly carried the burden.
“For buyers, it removes a lingering question mark over future costs. For sellers, it makes homes cleaner, clearer and more competitive.”
Nina Harrison, Buying Agent, Haringtons
Nina Harrison, buying agent at Haringtons UK, comments: “Capping ground rent at £250 is a very positive thing for buyers. For many, the fear has always been that a cost which already feels unfair could creep up over time like a runaway train, putting them off leasehold flats altogether.
“A clear cap takes that anxiety away and gives buyers far more confidence about what owning the flat will actually cost in the long term. It also helps level the playing field between newer apartments built after 2022, where ground rents were scrapped entirely, and older flats that have felt at a disadvantage ever since.
archaic system“That’s good news for sellers too, because predictable, capped costs make homes easier to explain, easier to mortgage and ultimately easier to sell.
“For too long, homeowners have been paying rent on the ground their own home sits on, an archaic system that feels increasingly out of step with modern home ownership.”
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