Government ‘to cap ground rent’ as plans to scrap leasehold abandoned

Posted on Tuesday, May 16, 2023

New rules on leasehold to be introduced after Michael Gove forced to U-turn on his pledge to scrap the system. 

Leaseholders may only have to pay a ‘peppercorn’ ground rent under proposals being considered by the Government, it is reported.

Ministers have backed away from scrapping leasehold arrangements altogether as Levelling Up Secretary Michael Gove (main picture) had promised.

Legal complexities were blamed for the U-turn, and now the Government wants to cap ground rent at 0.1% of a property’s value, according to The Times.

Rules restricting the amount charged in service charges and a ban on commission for buildings insurance are also said to be in the pipeline.

“I don’t believe leasehold is fair in any way. It is an outdated feudal system that needs to go. And we need to move to a better system and to liberate people from it,” Gove said in January.

But it appears that opposition from minister colleagues may have forced the change of policy.


The complex rules of leasehold ownership made it impossible for the Government to abolish the system, according to the Association of Leasehold Enfranchisement Practitioners (ALEP).

Mark Chick, Director, ALEP

Mark Chick, ALEP director and senior partner at Bishop & Sewell, says: “The news that Michael Gove intended to abolish leasehold garnered plenty of headlines at the time, but the reality is that there was never any realistic prospect of the leasehold system being scrapped during this Parliament. Leasehold is an incredibly complex area of the law which has developed over centuries.”

“Leasehold is an incredibly complex area of the law which has developed over centuries, and it cannot simply be abolished or replaced overnight.

“We look forward to hearing further details of the next phase of the Government’s leasehold reform agenda in the King’s Speech later this year.”

Via @TheNegotiator