Leasehold

What is a peppercorn ground rent under the Leasehold Reform (Ground Rent) Act 2022?

For most new leases granted on or after 30 June 2022, the Act says the permitted rent is a peppercorn, which means no money changes hands. Government guidance explains that start date. A home survey does not read the lease and cannot tell you what ground rent you will pay.

Last reviewed 24 October 2026. Written for buyers in England and Wales unless this answer says otherwise. No named surveyor has signed this page. It is general guidance, not a report on your house, and not legal advice.

What is the fuller explanation?

The peppercorn limit is not a description of every flat on the market. A lease granted in 1998 can still reserve a money rent, including a rising one, because the Act was aimed at new leases. Shared-ownership rules are in a neighbouring section of the Act. Your solicitor reads the actual lease. The surveyor walks the building.

Do not negotiate a condition rating as if it were the ground rent. They are different problems. Ask the solicitor to tell you the rent, whether it rises, and whether the lease is one the Act covers. A seller’s memorandum that says “peppercorn” is not the lease. Read the lease.

What should you ask your surveyor?

Nothing in the flat’s condition tells you the ground rent. Please confirm you did not assess the lease.
Which building defects should I still separate from the legal costs of the flat?
Did you see anything, such as cladding, that the solicitor should put next to the lease enquiry?

What are the typical next steps?

Ask the solicitor for the ground-rent clause and the date the lease was granted.
Do not assume a 2024 sale means a 2024 lease. The lease may be decades old.
Keep service charges, ground rent and condition in three columns.

Costs vary with the building and with who you instruct. Where this page does not cite a published figure, ask the surveyor, a relevant specialist, or your solicitor for a written quote. Do not treat a forum average as the price.

Also asked about this

Is a peppercorn the same as a zero service charge?

No. Service charge is the cost of running the building. Ground rent is the rent under the lease. A peppercorn ground rent can sit beside a large service charge.

Does the Act cap existing rising rents?

Do not take that from this page. The guidance we cite is about leases granted from 30 June 2022. Ask the solicitor about the lease you are buying.