In short
If you buy a leasehold home in England or Wales, you may pay a service charge for the building’s upkeep and a ground rent, which on leases granted on or after 30 June 2022 is usually a peppercorn (zero). A landlord must consult you if your share of planned works exceeds £250, or £100 a year for a long-term agreement. Ground rent on leases granted on or after 30 June 2022 is usually a peppercorn (zero). A £250 cap on ground rent in existing leases has been announced but is not law on 14 October 2026. Scotland and Northern Ireland work differently.
Service charges
GOV.UK says that if you pay a service charge you can ask for a summary of how it is calculated and what it is spent on, plus supporting paperwork such as receipts. The landlord must provide it; GOV.UK adds that “it’s a criminal offence if they do not.”
- Consultation: the landlord must consult you (a “Section 20” consultation) if your share will exceed £250 for planned work, or £100 per year for work or services lasting over 12 months. There is a cap on what you must pay if you were not properly consulted.
- Insurance: the landlord usually insures the building as part of the service charge. You can ask for a summary of the policy and challenge the cost at a tribunal if it seems unreasonable.
- Reserve (sinking) funds: you may pay into these for future repairs; money paid in is generally not refundable, for example if you move.
- Disputes: you can apply to a tribunal if a charge seems unreasonable, the work is unsatisfactory, or you should not pay it at all. You cannot apply if you have agreed to pay, the matter is already before a court, or the charge is fixed.
Ground rent
For leases granted before 30 June 2022, GOV.UK says you only need to pay after a formal written demand, the landlord can recover unpaid ground rent for up to 6 years, and it can rise only if you agree or the lease allows. For leases granted on or after 30 June 2022, ground rent is usually a peppercorn. That applies even if you bought the lease from another leaseholder, but only if the lease itself was granted on or after that date; otherwise you pay what your lease says. Always read the lease, and ask your conveyancer to explain the ground rent and any review clause.
What the 2024 and 2026 reforms mean now
| Measure | Position on 14 October 2026 |
|---|---|
| Removal of the 2-year wait for lease extension or freehold claims (s.27, Leasehold and Freehold Reform Act 2024) | In force from 31 January 2025 (confirmed for Wales by the Welsh Government) |
| Right to Manage cost changes (ss.49 to 52 and 64) | In force in Wales from 3 March 2025, per the Welsh Government |
| Service charge transparency, standardised information (Part 4) | The Act contains the provisions; I did not find a commencement date |
| Standard valuation method for enfranchisement | In the Act (s.37); I did not find that it is in force |
| £250 ground rent cap for existing leases, peppercorn after 40 years | Announced on 27 January 2026 in a draft Commonhold and Leasehold Reform Bill; “could come into force in late 2028” |
The Welsh Government’s statement says other parts of the 2024 Act need further consultation and secondary legislation before they commence. Treat anything without a date as an intention. The GOV.UK announcement says the draft Bill’s reforms apply across England and Wales and that it has not yet passed through Parliament. See also leasehold and freehold.
Scotland and Northern Ireland
Scotland. mygov.scot describes property factors: companies, councils or housing associations that manage shared areas such as roofs, external walls, stairwells and lifts. They arrange repairs, insurance and service contracts. Your title deeds usually state whether you must have a factor and how to appoint or dismiss one; if not, default rules usually need a majority of owners.
Northern Ireland. nidirect says ground rent is payable where the documents include a lease or fee farm grant; amounts are typically £10 to £100 a year. You can apply to Land Registry to buy it out. The price is nine times the annual rent, plus rent owed and a £50 fee. Flat and apartment owners cannot buy out their ground rent. Do not apply the English rules above to a Northern Irish home.
What it costs
- A service charge and any ground rent are set by your lease and the landlord; the sources give no standard figure.
- Northern Ireland buy-out: nine times the annual ground rent, plus arrears calculated daily and the £50 fee (nidirect’s own example: £100 annual rent and 82 days owed totals £972.47).
- Check these costs before you offer: they affect mortgage affordability and resale.
Which professional to consult
A conveyancer reads the lease and the service charge accounts before you commit: see conveyancer. A surveyor can report on the condition of the building: see surveyor. Check yourself that they are regulated.
Frequently asked questions
Can my landlord charge anything they like?
No. You can ask for a summary of costs and challenge an unreasonable charge at a tribunal, unless you have agreed to pay.
Do I pay ground rent on a new-build flat?
If the lease was granted on or after 30 June 2022, usually a peppercorn. Read your lease.
Is the £250 cap in force?
No. It was announced in a draft Bill on 27 January 2026.
What if the landlord skips the consultation?
GOV.UK says there is a cap on what you must pay if you were not properly consulted.
Do these rules apply in Scotland?
No. The GOV.UK guide to the leasehold reforms covers England and Wales only. Scotland has property factors, described above.
More guides on owning
Sources
- Leasehold property: service charges and other expenses (GOV.UK) (consulted 14 October 2026)
- Leasehold property: overview (GOV.UK) (consulted 14 October 2026)
- Guide to the Leasehold and Freehold Reform Bill (GOV.UK) (consulted 14 October 2026)
- PM: we're capping ground rents at £250 (GOV.UK, 27 January 2026) (consulted 14 October 2026)
- Leasehold and Freehold Reform Act 2024: contents (legislation.gov.uk) (consulted 14 October 2026)
- Leasehold and Freehold Reform Act 2024 (Commencement No. 2) Regulations 2025 (legislation.gov.uk) (consulted 14 October 2026)
- Written Statement: Update on Leasehold Reform, 7 March 2025 (gov.wales) (consulted 14 October 2026)
- Buying out your ground rent (nidirect) (consulted 14 October 2026)
- Property factors (mygov.scot) (consulted 14 October 2026)