Millions of leaseholders across England and Wales are set to benefit from a major shake-up of the outdated leasehold system, but only for future builds and conversions where leasehold will be abolished, while ground rents will be capped at £250 a year, reducing to a peppercorn cap after 40 years.

‘This approach will cap high ground rents, focusing on addressing the problems of unaffordable and continuously escalating ground rents,’ the government said. ‘These reforms will necessarily have effects on existing contractual arrangements and investments, something which this government does not undertake lightly.’

There are approximately 3.8m leasehold properties with a ground rent obligation across England and Wales, with leaseholders paying over £600m a year.