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when will ground rent be abolished ?

**Title: When Will Ground Rent Be Abolished? An Update on the Leasehold Reform (Ground Rent) Act 2022**

**Introduction**

The abolishment of ground rents is a significant change in the property landscape of England and Wales, particularly affecting leaseholders. After years of lobbying and parliamentary debates, the Leasehold Reform (Ground Rent) Act 2022 was passed, aiming to address long-standing issues faced by leaseholders. In this blog post, we’ll dive into when ground rent will be abolished according to the Act, who it affects, and what it means for existing leaseholders.

**The Act and Its Effective Dates**

The Leasehold Reform (Ground Rent) Act 2022 came into force on June 30, 2022, for the majority of cases. This means that all new leases created after this date will not have any ground rent, a seemingly straightforward policy. The provisions in the Act state that any ground rent imposed must be a peppercorn, which is effectively rent of zero. Beyond this, the Act also seeks to prevent administrative fees being levied for the collection of a peppercorn, ensuring a clean slate for all new lease agreements.

There is, however, a special exemption: the inclusion of ground rent in certain retirement properties. Ground rent in these cases will not be abolished until April 1, 2023. The reason behind this delay is to provide extra security to those retirees who have made financial arrangements based on the expectation of receiving ground rent from their leasehold properties.

**New Lease Pricing**

Under the new legislation, any new lease created after June 30, 2022, should not include clauses for ground rent. This is a monumental shift for leaseholders, as the removal of ground rent will benefit future buyers significantly, especially in the current UK housing market where property values continue to rise. The abolition of ground rent will relieve homeowners from potentially exorbitant costs, thus providing more financial stability over the lifetime of their lease.

**The Impact on Existing Leaseholders**

For those who have existing leases, the benefits of the Ground Rent Act 2022 do not automatically apply. The provision primarily addresses new lease agreements and informal lease extensions, not existing contracts. However, the Act comes with a promising clause that allows for punitive action against landlords who continue to charge ground rent beyond what is permitted.

Local authorities and Trading Standards will have the ability to impose substantial fines on freeholders who refuse to comply with the new laws, with penalties ranging from £500 to £30,000 per qualifying lease. This powerful enforcement mechanism is in place to encourage compliance and ensure that existing leaseholders are protected.

**Informal Lease Extensions**

The Act also introduces key changes for informal lease extensions, a process agreed upon verbally, outside the formal statutory route. Many property owners found this route more flexible, though without the legal protections of formal agreements. The Ground Rent Act 2022 applies these legal protections to informal lease extensions, including the abolition of ground rent and the prohibition of administrative fees.

**Conclusion**

In summary, the Leasehold Reform (Ground Rent) Act 2022 brings a much-needed reform to the leasehold market. Ground rent was abolished on June 30, 2022, for most UK leaseholds, and will be abolished on April 1, 2023, for retirement properties. While this change does not affect existing leaseholders directly, they too stand to benefit from the enhanced enforcement measures and prohibitions against unfair administrative practices.

The abolition of ground rent is part of a broader movement towards better conditions and financial security for leaseholders, a significant step towards fair property rights in England and Wales. Homeowners, in turn, should ensure their legally binding agreements reflect these changes and understand their rights and responsibilities moving forward.

For more information and advice on navigating leasehold properties, visit [GOV.UK](https://www.gov.uk/guidance/leasehold-reform-ground-rent-act-2022) and consider consulting a professional in property law.

**References**

– [Leasehold Reform (Ground Rent) Act 2022 – GOV.UK](https://www.gov.uk/guidance/leasehold-reform-ground-rent-act-2022)
– [Leasehold reforms: what you need to know about changes to the law – HOA](https://hoa.org.uk/2021/01/lease-extension-process/)
– [Ground rents to be banned on new leases from 30 June saving homeowners £100s/yr – here’s what’s happening – MoneySavingExpert](https://www.moneysavingexpert.com/news/2022/04/ground-rent-to-be-banned-on-new-leases-from-this-summer/)
– [The end of Ground Rent: Leasehold Reform Act 2022 – Wright Hassall](https://www.wrighthassall.co.uk/knowledge-base/the-end-of-ground-rent-leasehold-reform-act-2022/)
– [When will ground rent be abolished? | Urban Jungle](https://myurbanjungle.com/explore/blog/when-will-ground-rent-be-abolished/)
– [Are Ground Rents Really Being Abolished? – Freehold-collective](https://www.thefreeholdcollective.co.uk/are-ground-rents-really-being-abolished/)
– [Ground rents banned, but existing leaseholders must wait – Today’s Conveyancer](https://todaysconveyancer.co.uk/ground-rents-banned-but-existing-leaseholders-must-wait/)
– [Govt scraps ground rent for millions of leaseholders – FTAdviser](https://www.ftadviser.com/mortgages/2021/01/07/govt-scraps-ground-rent-for-millions-of-leaseholders/)
– [Ground rent ‘abolished’ but only for new leases – Deacon](https://deacon.co.uk/2022/05/ground-rent-abolished-but-only-for-new-leases/)
– [How will the abolition of ground rents affect existing leaseholds? – Property118](https://www.property118.com/how-will-the-abolition-of-ground-rents-affect-existing-leaseholds/)
– [Freehold & Leasehold Explained Video](https://www.youtube.com/watch?v=nduU5kOQt9I)

This is a significant legal change that will undoubtedly impact the housing market and financial security for many homeowners in England and Wales, and it’s essential to stay informed and understand your rights as a leaseholder.