Separating Headlines from Reality on Ground Rent Reform

Recent coverage on the government’s Draft Commonhold & Leasehold Reform Bill has created a lot of noise. Headlines have suggested changes, including caps on ground rents, abolition for some leases, and a shift towards commonhold ownership. While these stories raise awareness, they can also create confusion about what is actually in effect today.

On the ground at Innovus, teams have seen increased queries from leaseholders who have been questioning charges or delaying decisions based on assumptions drawn from media coverage. It is important to clarify what is law now and what remains a proposal.

Headlines versus Current Law

The draft Commonhold and Leasehold Reform Bill sets out a number of significant proposals:

• A cap on existing ground rents at £250 per year, moving to a long-term peppercorn rent
• Measures to restrict the creation of new leasehold flats and promote commonhold as the default tenure
• Changes to enforcement, including removing the right to forfeit a home for small arrears
• Leaseholders may stop payments assuming reform is already in place
• Managing agents and freeholders may face disputes or increased correspondence
• Decisions on lease extensions or enfranchisement may be postponed based on incorrect assumptions
• Existing lease obligations remain enforceable. Until law changes, leases determine payments and terms
• New legislation will not automatically apply retrospectively. Existing leases retain their original conditions
• Monitoring progress of the Bill is important, but property teams and leaseholders should continue to follow current lease agreements
• Ground rent management and arrears reduction
• Portfolio oversight and compliance
• Resident and stakeholder communication support

The intention behind these reforms is to modernise the leasehold system and address concerns about fairness. However, the Bill has not yet passed through Parliament. Until it does, existing leases remain legally binding.

Why the Gap Matters

The period between headline coverage and legal change is significant:

Clear communication is essential. Explaining the current legal position and the proposed changes reduces confusion and helps residents meet their contractual obligations.

Practical Guidance for Today

Preparing for Change Without Assuming It

There is no doubt that leasehold reform is moving forward. Property professionals, resident management companies and leaseholders should monitor developments closely and consider how proposed changes may affect them in the future.

At the same time, operational decisions should be grounded in the law as it stands today. Balancing awareness of reform with compliance under current lease terms is the most practical approach during this transitional period.

How Innovus Can Support You

Leasehold reform sits alongside day-to-day responsibilities such as ground rent collection, lease interpretation, resident communication and compliance. Navigating both at the same time can be complex.

Innovus supports freeholders, investors, managing agents and resident management companies across England and Wales through:

These services help clients maintain compliance, manage obligations effectively, and communicate clearly with leaseholders while preparing for future legislative change.

Looking Ahead

Reform is coming and will have a significant impact on leasehold management. Focusing on clarity, education, and accurate information now will help everyone navigate the transition more smoothly. Leaseholders, freeholders, and managing agents can prepare operationally without assuming immediate legal change.