Ground Rent Capped at £250,What This Means.
Recent changes to ground rent rules mean many leasehold properties are now capped at £250 per year. This update could remove a major barrier for homeowners who’ve struggled to sell, remortgage, or secure mortgage approval.
What’s Changed?
One of the most persistent issues facing leasehold homeowners over the past decade has been escalating ground rent — particularly clauses that double every 5, 10 or 15 years.
These arrangements caused problems because:
Ground rent could quickly become unaffordable
Properties were deemed unmortgageable by many lenders
Sales collapsed late in the process
Homeowners felt trapped
Recent regulatory and legislative changes now mean that ground rent on many leasehold properties is capped at £250 per year, bringing long-awaited clarity and relief to thousands of homeowners.
Why Ground Rent Was Such a Problem
From a lender’s perspective, high or escalating ground rent is a risk.
Lenders became increasingly cautious where ground rent:
Exceeded 0.1% of the property value
Included doubling clauses
Rose more frequently than every 20 years
Could exceed £250 per year (or £1,000 in London)
In many cases, lenders either:
Declined mortgage applications outright
Requested costly Deeds of Variation
Reduced loan-to-value
Or withdrew offers late in the process
This left many homeowners unable to sell or refinance — even if they had good equity and affordability.
How the £250 Cap Helps Homeowners
1. Unlocking Sales That Previously Fell Through
For sellers whose transactions collapsed due to lender concerns over ground rent, the cap removes one of the biggest red flags.
Buyers can now access a wider range of lenders, improving confidence and reducing last-minute issues.
2. Improving Mortgage Eligibility
Lenders are far more comfortable lending on properties where ground rent:
Is predictable
Is capped at a reasonable level
Doesn’t escalate aggressively
This change brings many leasehold homes back within mainstream lending criteria, rather than forcing borrowers into specialist or higher-rate products.
3. Supporting Remortgages
Some homeowners were stuck on expensive standard variable rates because lenders wouldn’t remortgage their property due to ground rent clauses.
With the cap in place, more borrowers can now:
Remortgage onto competitive fixed rates
Review their lender options
Improve monthly affordability
Who Benefits Most From This Change?
This update is particularly positive for:
Flat owners in modern developments
First-time buyers who purchased leasehold homes in the last 10–15 years
Home movers whose sale previously stalled
Buy-to-let landlords with leasehold properties affected by lender restrictions
If your property was flagged for ground rent issues in the past, it’s well worth revisiting your options.
A Note of Caution
While this change is welcome, not all leasehold arrangements are identical.
Some properties may still require:
Confirmation of updated lease terms
A Deed of Variation (in older cases)
Solicitor clarification for lenders
That’s why it’s important not to assume — but to check properly before progressing.
What Should You Do Next?
If you’ve previously:
Been unable to sell due to ground rent
Had a mortgage declined or restricted
Been stuck on an uncompetitive rate
This is a good moment to reassess.
Ground rent no longer needs to be the reason your plans are on hold.
One Sensible Step to Take
Ask us to review your leasehold position and mortgage options.
We’ll check lender criteria, confirm how your ground rent is viewed, and let you know whether this change opens up new opportunities for you.
Manchester Independent Mortgages Ltd is authorised and regulated by the Financial Conduct Authority (FCA 431647).
The information above is for guidance only and does not constitute personal advice.
Your home may be repossessed if you do not keep up repayments on your mortgage.