Keir Starmer has announced plans to cap ground rents at £250 a year for leaseholders in England and Wales, alongside proposals to ban leaseholds for new flats and give existing leaseholders the right to switch to commonhold.
The prime minister revealed the change in a TikTok video, calling it “good news for homeowners” and saying many leaseholders would save hundreds of pounds a year. He said easing housing costs was central to tackling the cost-of-living crisis and described the move as a key election promise now being delivered.
The reforms will be set out in a draft leasehold and commonhold reform bill to be introduced on Tuesday. Under the proposals, new leasehold flats would be banned entirely, while current leaseholders would gain the right to convert to commonhold, giving residents collective control over building management and budgets.
The bill also plans to abolish forfeiture rules that allow people to lose their homes over debts as small as £350, replacing them with a new enforcement regime and added protections for homeowners.
Housing secretary Steve Reed said the current leasehold system had left many flat owners trapped with unaffordable ground rents, adding that the government was stepping in to save leaseholders money and restore control over their homes. He said the reforms would strengthen home ownership and bring an end to leasehold practices.
The Residential Freehold Association criticised the proposals, calling the ground rent cap unjustified and warning it could undermine investor confidence in the UK housing market, arguing it interferes with existing property rights and contracts.
