Skip to main content
What is ground rent?

Ground Rent is a fee you pay to the freeholder that owns the land on which your property is built.

Alison avatar
Written by Alison
Updated over a week ago

What is ground rent?

Ground Rent is a fee you pay to the owner of the land and/or the remaining parts of the building where your property is located. It is often a condition of buying your home.

With a leasehold property, you will own the part you live in, however, the freeholder will own the land the property is on, along with any communal areas.

If you want to purchase a leasehold property, you may find there are some additional fees to pay, one of these is ground rent.

The cost of ground rent can vary from a tiny sum (known as a peppercorn) or a large sum that can increase over time.

We can accept ground rent charges up to £250 (£1000 within greater London) per year, or 0.2% of the current property value (0.1% for new builds), whichever is lower.

Whilst most old leases will keep ground rent within the above limits, over the last 25 years some developers and landlords have commenced leases on properties and escalated the payable ground rent above acceptable limits.

Will I have to pay for it?

If you're unsure, it will be worth checking with your estate agent, as they will be able to tell you if you will need to pay ground rent.

It is best to find out this information as early in the process as you can from the estate agent so there are no surprises.

The property valuer will check this information when they complete the valuation and we would be guided by their comments as to whether the ground rent charge is acceptable.

Will my ground rent increase?

It is possible for ground rent to increase over time, however, the freeholder will let you know how much it will increase. You can ask this question when you view properties.

The ground rent review period must be equal to or greater than 10 years and the ground rent should double no sooner than 20 years for Gen H to accept this.

Did this answer your question?