The government has announced that its ban on charging ground rent on new leases in England and Wales comes into force on June 30, in just over two months’ time.
From 30 June 2022, any investment buyer or owner occupier purchasing a home on a new long lease will now be freed from these annual costs.
Landlords will be banned from charging ground rent to future leaseholders; in preparation, many landlords have already reduced ground rent to zero for homebuyers starting a new lease with them.
The government says anyone preparing to sign a new lease on a home in the next two months should speak to their landlord to ensure their ground rent rate reflects the upcoming changes.
Leasehold minister Lord Stephen Greenhalgh says: “This is an important milestone in our work to fix the leasehold system and to level up home ownership.
“I welcome the move from many landlords who have already set ground rent on their new leases to zero and I urge others to follow suit ahead of this becoming law.”
Other measures, mostly announced last year, include a new right for leaseholders to extend their leases to 990 years at zero ground rent and an online calculator to help leaseholders find out how much it would cost to buy their freehold or extend their lease.
In addition, thousands of existing leaseholders have also already seen a reduction in their inflated ground rent costs when the Competition Market Authority secured commitments with major homebuilders to stop doubling ground charges every year for leaseholders.
Those who own properties with Aviva, Persimmon, Countryside Properties, Taylor Wimpey and others will see their ground rent returned to the rate it was when they first bought their home.
The CMA’s investigation is continuing into Barratt Developments, Brigante Properties and the investment group Abacus Land and Adriatic Land.
The ban on landlords charging ground rent on new residential leases, announced at the end of last week, will also apply to retirement homes.
The government says this will come into force no earlier than April 1 2023.
