Britain's Feudal Landlords Won't Go Quietly

Britain’s feudal property tributes known as “ground rent” are heading for the scrap heap. Keir Starmer’s Labour government is pledging to cap these payments at an annual £250 ($345) and then reduce them to a financially insignificant level after 40 years. Few should mourn the demise of an archaic and abusive system that’s imposed an unnecessary burden on millions of homeowners. How the phase-out happens matters, though. Taking the landlord class to task may play well politically — but it also raises the threat of legal challenges and damage to investor confidence in the UK.

In theory, ground rent is a fee paid to the freeholder for the right to use the land — but in practice, it’s money for nothing. Buyers of leasehold homes have already paid for this right upfront in the purchase price of their property. There’s no reason to make them pay twice, and no service is provided in return. England and Wales are a global anomaly in maintaining this practice (Scotland has a different system). Ground rent at a nominal, or “peppercorn,” level continues to exist for arcane legal-historical reasons and about a quarter of leasehold properties pay these. But until recently, there was nothing to restrain freeholders from charging more — and an estimated 3.8 million households currently pay non-token amounts (the average annual bill as of 2024 was £304).