What the UK government’s ground rent cap means for Thai investors in London property

The UK government has recently announced plans to cap ground rent as part of broader leasehold reforms. Ground rent will be capped at £250 annually and will be reduced over time. For Thai investors holding or considering London property, this reform brings additional certainty, ownership costs and improved long-term investment confidence.

Leasehold ownership and Thai investors

Most apartments in London are sold on a leasehold basis, a long-standing, well-regulated ownership structure in the UK. Leasehold ownership defines the length of the ownership, responsibilities of owners and managing agents and ongoing costs such as service charges and ground rent.

What is ground rent?

It is a fixed annual payment paid by the leaseholder to the freeholder. This charge is completely different from maintenance and service fees. Ground rent does not pay for building upkeep. It is simply a part of the legal framework of leasehold ownership in the UK. In most cases, ground rent has been modest; however, some older leases allowed annual increases. This led overseas investors to seek clear rules and long-term visibility.

What has already changed and what is coming next?

Since 2022, new leasehold properties in England and Wales have been sold without any ground rent at all. For many Thai buyers who’ve purchased London apartments, this change is already in place and working in their favour.

Under the new reforms, ground rent on existing leasehold properties will be capped at £250. This implementation will help eliminate uncertainty for existing owners who are paying higher amounts. Over time, this charge will reduce to a peppercorn level. Service charge reporting will also become clearer and easier to access, which will, in return, help London property owners manage expenses more easily.

The proposed cap on ground rent for existing properties is still progressing through the UK legislative process. Subject to parliamentary approval, implementation of this reform can be expected around late 2028.

Why are the new ground rent reforms beneficial for Thai investors

Discerning Thai investors typically take a long-horizon view of overseas property. These reforms will improve cost predictability, support property values and resale confidence and reduce ownership friction without affecting rental demand.

Connect with Benham and Reeves Thailand

Benham and Reeves is backed by over six decades of experience. With over 21 branches in London and a local office in Thailand, our experienced agents will assist Thai investors through every stage of UK property ownership. We can help understand leasehold structures, manage rental property and plan for long-term returns with confidence.

Whether you already own a London apartment or are exploring stable opportunities for your first UK investment, speak to our Thailand team today. We can also explain how the ground rent cap affects your position.