Leasehold: From the ground up

• The leasehold system lacks transparency and makes enfranchisement expensive and difficult.
• The new Leasehold Reform (Ground Rent) Act 2022 aims to end abuse and to make the system fairer to the purchaser.

With the government’s recently declared intention to implement a ‘a comprehensive programme of reform to improve fairness and transparency in the leasehold market,’ first on the agenda to be resolved is problem of future ground rents, with the Leasehold Reform (Ground Rent) Act 2022 coming into force on 30 June. In 2019-20, there were an estimated 4.6m dwellings—nearly 20% of dwellings, one third of which are houses and two thirds flats, in England and Wales—which were subject to ground rents. The system lacks transparency, and causes considerable misunderstanding and grief.

Originally the ground rent was a peppercorn, nominal. No service given. No problem. In recent times the ground rent has become a not insignificant sum, and more frequently doubling