Ground rent: what it is, how much it can rise, and the doubling-clause trap

In England and Wales, ground rent is mainly a leasehold issue: new regulated long residential leases are generally limited to a peppercorn, while older leases still turn on their wording. Scotland and Northern Ireland are different, so this article flags those points where they matter.

What is ground rent?

Ground rent is the annual rent a long leaseholder pays to the freeholder or landlord under the lease, usually without receiving a specific service in return. Government guidance says, “A ‘ground rent’ is a property industry term given to a rent that is usually paid annually by owners of residential long leases to their landlord.” In England and Wales the term itself is not the statutory label, because “A ground rent is not defined in law in England and Wales – the term ‘rent’ is used in legislation covering the long leasehold sector as it is in other areas of property law.” For new regulated leases, the permitted rent is normally a peppercorn: “In this Act a ‘peppercorn rent’ means an annual rent of one peppercorn.” In Scotland, English-style ground rent is not a current residential leasehold concept: feuduty was abolished from 28 November 2004. Northern Ireland has its own ground-rent regime, and nidirect says the annual amount is usually between £10 and £100.

Is ground rent the same as service charge?

Ground rent is not the same as service charge: ground rent is rent reserved by the lease, while service charge is money for services, repairs, maintenance, insurance or similar costs. The legal distinction matters because a lease may use rent language loosely, but the 2022 Act says, “A sum expressed to be payable in respect of rates, council tax, services, repairs, maintenance, insurance or other ancillary matters is not rent for the purposes of this Act merely because it is reserved as rent in the lease.” Service charge and ground rent are often billed together in practice, especially in flats, which is why leaseholders confuse them; the English Housing Survey notes that “some leaseholders do not know what ground rent is, or confuse it with their service charge.” The price gap is also real: in 2023–24, “average (mean) ground rent for all leaseholders was £304 per annum,” while mean annual service charge was £1,720 among those who paid one.

Is ground rent classed as rent?

Ground rent is classed as rent for English and Welsh leasehold purposes, even though ground rent is the industry term and the legislation normally says rent. The Leasehold Reform (Ground Rent) Act 2022 defines the concept broadly: “‘rent’ includes anything in the nature of rent, whatever it is called.” Government enforcement guidance puts the point directly: the Act “does not refer to ‘ground rent’ which is an industry term and not defined in legislation and instead it uses the ‘rent’ which is in effect what a ground rent is.” That classification is why statutory ground-rent demands use rent-notice machinery: under section 166 of the Commonhold and Leasehold Reform Act 2002, “A tenant under a long lease of a dwelling is not liable to make a payment of rent under the lease unless the landlord has given him a notice relating to the payment.” Tax may analyse receipts differently, but that does not change the leasehold demand.

When and by how much can ground rent go up?

For an existing lease in England and Wales, ground rent can go up only when, how often and by the amount the lease allows; for most new regulated leases granted from 30 June 2022, it is capped at a peppercorn and cannot rise in money terms. The 2022 Act says, “The permitted rent is a peppercorn rent,” and government guidance says the peppercorn limit “generally only applies to new residential leases that were granted after commencement of the Act, that is leases granted on or after 30 June 2022, or 1 April 2023 for leases of retirement homes.” Older leases are different: the increase may be fixed, doubling or index-linked, and MHCLG describes escalation as “fixed increments (e.g., doubling every 10 years or every 20 years) or index-linked increases (e.g., linked to the Retail Price Index (RPI)).” A landlord still has to demand long-lease rent properly, because section 166 says the tenant is not liable unless a prescribed notice has been given.

How do you calculate an RPI-linked ground rent?

An RPI-linked ground rent is usually calculated as current rent × current RPI ÷ base RPI, unless the lease gives a different formula. The commonly used drafting formula is described by JMW Solicitors: “a Rent (R) is multiplied by the Current Index Value (CIV), then the result is divided by the Base Index Value (BIV) and that produces the New Rent (NR).” The ONS confirms the usual index source: “The Retail Price Index (RPI) is published on the ONS website under the unique time series identifier CHAW.” The base index is normally the RPI figure at the lease start or last review date, and the current index is the RPI figure at the review date, but the lease decides the month, rounding, minimum increase and whether decreases are allowed. The CMA found real variation in these clauses and said it saw RPI-linked ground-rent clauses “which varied significantly,” including many upward-only clauses with no matching decrease if RPI fell.

Should you buy a flat with a doubling ground rent?

You should buy a flat with a doubling ground rent only if the doubling interval, future rent, mortgageability and extension cost still make the flat saleable; a 10-year doubling clause is a serious red flag, while doubling every 25 years is less aggressive but still needs modelling. There is no automatic statutory ban on buying a doubling-rent flat, and courts do not generally rewrite a clear bargain because it later looks bad: the Supreme Court warned that “it is not the function of a court when interpreting an agreement to relieve a party from the consequences of his imprudence or poor advice.” The practical issue is resale and lending. The CMA says these terms “can lead to people being trapped in homes they cannot sell or mortgage,” and Bank of Ireland’s handbook gives the market line that “doubling every 5, 10 or 15 years” is not permitted. A statutory flat lease extension can remove the rent from the new lease because “Statutory lease extensions for flats must already be granted at a peppercorn.”

What is the ground rent AST trap?

The AST trap has closed: in England, from 27 December 2025, a lease with a fixed term of more than 21 years cannot be an assured tenancy regardless of ground rent, so the old £250 outside London and £1,000 London thresholds no longer turn a long lease into an AST. The Renters’ Rights Act 2025 inserted the long-lease exclusion, covering “A fixed term tenancy of a term certain of more than 21 years from the date of the grant of the tenancy,” and government guidance says, “All leases with a fixed term of more than 21 years will be removed from the assured tenancy system.” The old trap mattered because a post-1990 tenancy was low-rent only if rent was £1,000 or less in Greater London or £250 or less elsewhere, and Ground 8 could make arrears mandatory where yearly rent was three months overdue. Wales no longer creates Housing Act 1988 assured tenancies, and some lender handbooks are still catching up: Handelsbanken still says AST-causing ground rent is unacceptable, while Fleet has updated its wording.

Should you buy a flat with ground rent over £250?

You can legally buy a flat with ground rent over £250 in England and Wales, but the real problem today is mortgageability, not the old assured-tenancy trap. The trap has closed for long leases, but MHCLG still records £250 as a lender screen: “The point at which ground rents exceed either 0.1% of property value or £250 is a common standard at which mortgage lenders have traditionally started imposing additional checks.” Its January 2026 lender review found that “all but one of the 12 major lenders we reviewed had policies relating to stricter checks for leases with ground rents of over 0.1% or £250, frequent ground rent rises or doubling clauses.” That makes the practical question: will your lender accept it, will future buyers’ lenders accept it, and can the rent be reduced by statutory lease extension or deed of variation? MHCLG estimated “around 770,000 to 900,000 leaseholders pay over £250 per year,” so £250 is common enough to be managed but high enough to slow conveyancing.

Can you get a doubling ground rent reduced under the new rules?

You cannot generally force an existing doubling ground rent down under the new rules unless you use a separate route such as statutory lease extension, enfranchisement, deed of variation, or benefit from a CMA undertaking. The 2022 Act ended most monetary ground rents for new leases, but the official position is that “the 2022 Act did not alter the position for existing leaseholders.” LEASE says the later ground-rent changes “have not been introduced yet, and it’s not yet known when this will happen,” and the government’s £250-cap announcement itself says the cap “could come into force in late 2028.” For a flat, the live statutory escape route is usually a lease extension: the 1993 Act grants “a new lease of the flat at a peppercorn rent for a term expiring 90 years after the term date of the existing lease.” A deed of variation may be needed for a sale or remortgage if the lender will not accept the doubling clause.

How do you get out of paying ground rent?

In England and Wales, you get out of paying ground rent by having a peppercorn new regulated lease, completing a statutory flat lease extension, buying the freehold where available, or agreeing a deed of variation; simply refusing to pay is not an exit. New regulated leases are capped because “The permitted rent is a peppercorn rent,” but that protection generally applies only to leases granted on or after 30 June 2022, or 1 April 2023 for retirement homes. For existing flats, the main statutory route is a lease extension granting “a new lease of the flat at a peppercorn rent for a term expiring 90 years after the term date of the existing lease.” Informal extensions are riskier because LEASE says you will “usually still have to pay ground rent on the same terms for the rest of the period of the original lease.” In Northern Ireland, a qualifying rent-payer can redeem ground rent at nine years’ purchase plus fees, but “the owners of flats and apartments can’t buy out their ground rent.” In Scotland, feuduty ended on 28 November 2004.

Last reviewed September 2026.

Sources

• GOV.UK, Leasehold Reform (Ground Rent) Act 2022 guidance — “A ‘ground rent’ is a property industry term given to a rent that is usually paid annually by owners of residential long leases to their landlord.” Source
• GOV.UK, Leasehold Reform (Ground Rent) Act 2022 guidance — “A ground rent is not defined in law in England and Wales – the term ‘rent’ is used in legislation covering the long leasehold sector as it is in other areas of property law.” Source
• Leasehold Reform (Ground Rent) Act 2022, section 4 — “In this Act a ‘peppercorn rent’ means an annual rent of one peppercorn.” Source
• Leasehold Reform (Ground Rent) Act 2022, section 22 — “A sum expressed to be payable in respect of rates, council tax, services, repairs, maintenance, insurance or other ancillary matters is not rent for the purposes of this Act merely because it is reserved as rent in the lease.” Source
• English Housing Survey 2023 to 2024 leasehold experience fact sheet — “Cognitive testing undertaken by the EHS team shows that some leaseholders do not know what ground rent is, or confuse it with their service charge.” Source
• English Housing Survey 2023 to 2024 leasehold experience fact sheet — “Among leaseholders who paid ground rent, average (mean) ground rent for all leaseholders was £304 per annum (median £120 per annum).” Source
• English Housing Survey 2023 to 2024 leasehold experience fact sheet — “Among leaseholders who paid a service charge, the average (mean) annual service charge was £1,720 (median £1,375), and was higher for leaseholders living in flats (mean £1,857, median £1,500) than those living in houses (mean £881, median £300), Annex Table 1.4.” Source
• Leasehold Reform (Ground Rent) Act 2022, section 22 — “‘rent’ includes anything in the nature of rent, whatever it is called.” Source
• GOV.UK, statutory guidance for enforcement authorities — “In its provisions, this Act does not refer to ‘ground rent’ which is an industry term and not defined in legislation and instead it uses the ‘rent’ which is in effect what a ground rent is.” Source
• Commonhold and Leasehold Reform Act 2002, section 166 — “A tenant under a long lease of a dwelling is not liable to make a payment of rent under the lease unless the landlord has given him a notice relating to the payment; and the date on which he is liable to make the payment is that specified in the notice.” Source
• Leasehold Reform (Ground Rent) Act 2022, section 4 — “The permitted rent is a peppercorn rent.” Source
• GOV.UK, Leasehold Reform (Ground Rent) Act 2022 guidance — “The peppercorn limit generally only applies to new residential leases that were granted after commencement of the Act, that is leases granted on or after 30 June 2022, or 1 April 2023 for leases of retirement homes (the ‘relevant commencement date’).” Source
• GOV.UK, Modern leasehold: restricting ground rent for existing leases — “The escalation can be by fixed increments (e.g., doubling every 10 years or every 20 years) or index-linked increases (e.g., linked to the Retail Price Index (RPI)).” Source
• JMW Solicitors, index-linked rent formula — “This provides that first a Rent (R) is multiplied by the Current Index Value (CIV), then the result is divided by the Base Index Value (BIV) and that produces the New Rent (NR).” Source
• ONS, Retail Price Index FOI page — “The Retail Price Index (RPI) is published on the ONS website under the unique time series identifier CHAW.” Source
• CMA response on ground-rent clauses — “During our investigation, we saw lease clauses providing for the escalation (or up-rating) of ground rent, for example those linked to RPI, which varied significantly.” Source
• Supreme Court judgment, Arnold v Britton — “Experience shows that it is by no means unknown for people to enter into arrangements which are ill-advised, even ignoring the benefit of wisdom of hindsight, and it is not the function of a court when interpreting an agreement to relieve a party from the consequences of his imprudence or poor advice.” Source
• CMA news release on leaseholders and ground rent — “These terms can lead to people being trapped in homes they cannot sell or mortgage.” Source
• UK Finance Lenders’ Handbook, Bank of Ireland Part 2 — “However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years.” Source
• GOV.UK, Leasehold Reform (Ground Rent) Act 2022 guidance — “Statutory lease extensions for flats must already be granted at a peppercorn (regardless of this Act).” Source
• Renters’ Rights Act 2025, section 31 — “A fixed term tenancy of a term certain of more than 21 years from the date of the grant of the tenancy.” Source
• GOV.UK, Guide to the Renters’ Rights Act — “All leases with a fixed term of more than 21 years will be removed from the assured tenancy system.” Source
• Housing Act 1988, Schedule 1 — “under which the rent payable for the time being is payable at a rate of, if the dwelling-house is in Greater London, £1,000 or less a year and, if it is elsewhere, £250 or less a year.” Source
• Housing Act 1988, Schedule 2 — “if rent is payable yearly, at least three months’ rent is more than three months in arrears;” Source
• UK Finance Lenders’ Handbook, Handelsbanken Part 2 — “Where the ground rent provisions cause (or, during the term of the lease, are likely to cause) the lease to be an assured shorthold tenancy under the Housing Act 1988 this is not acceptable.” Source
• UK Finance Lenders’ Handbook, Fleet Mortgages Part 2 — “From 27 December 2025, any lease with a fixed term of more than 21 years cannot become an assured tenancy, regardless of ground rent amount.” Source
• MHCLG, Policy statement on ground rents — “The point at which ground rents exceed either 0.1% of property value or £250 is a common standard at which mortgage lenders have traditionally started imposing additional checks.” Source
• MHCLG, Annex 5 Ground Rents — “As of January 2026, all but one of the 12 major lenders we reviewed had policies relating to stricter checks for leases with ground rents of over 0.1% or £250, frequent ground rent rises or doubling clauses.” Source
• MHCLG, Policy statement on ground rents — “We estimate around 770,000 to 900,000 leaseholders pay over £250 per year, of which 490,000 to 590,000 are in London and the South.” Source
• Leasehold and Freehold Reform Act 2024 explanatory notes — “However, the 2022 Act did not alter the position for existing leaseholders.” Source
• LEASE, future changes to ground rent — “The changes affecting ground rent have not been introduced yet, and it’s not yet known when this will happen.” Source
• GOV.UK, PM ground-rent cap announcement — “Subject to parliamentary timings, the ground rent cap could come into force in late 2028.” Source
• Leasehold Reform, Housing and Urban Development Act 1993, section 56 — “a new lease of the flat at a peppercorn rent for a term expiring 90 years after the term date of the existing lease.” Source
• LEASE, how to reduce ground rent — “If you extend your lease informally by negotiating an extension with your landlord, you will usually still have to pay ground rent on the same terms for the rest of the period of the original lease.” Source
• Ground Rents Act (Northern Ireland) 2001, section 1 — “Subject to subsection (2) and section 3, a rent-payer may, by complying with the requirements of this Act, redeem the ground rent to which his land is subject.” Source
• Ground Rents (Northern Ireland) Order 2002, article 2 — “For the purposes of paragraph 1 of Schedule 1 to ‘the Act’, the figure 9 is fixed as being the number of years purchase applicable to ground rents.” Source
• nidirect, buying out your ground rent — “But the owners of flats and apartments can't buy out their ground rent.” Source
• Abolition of Feudal Tenure etc. (Scotland) Act 2000, section 7 — “Without prejudice to section 13 of this Act, any feuduty which has not been extinguished before the appointed day is extinguished on that day; and accordingly no payment shall be exigible, in respect of feuduty, for that day or for any period after that day.” Source
• Abolition of Feudal Tenure etc. (Scotland) Act 2000 (Commencement No. 2) Order 2003, article 2 — “The day appointed under section 71 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 as the appointed day is 28th November 2004.” Source