Peppercorn Rent

In order for a lease to be legally enforceable there needs to be 'valuable consideration'.

With leasehold properties, valuable consideration takes the form of ground rent which is paid by the leaseholder to the freeholder or landlord.

Ground rents can be high and in recent years there has been much controversy around ground rents.

Historically, ground rents were very low - so much so that some freeholders and landlords asked for an actual peppercorn rather than money.

Although a freeholder could still technically ask you to pay an actual peppercorn, peppercorn rental has evolved to mean no ground rent is payable.

Existing leases may already have a peppercorn rent. If you choose to extend your lease using the formal Section 42 route, your ground rent will be reduced to a peppercorn rent as part of the process.

See more:

Should I be wary of buying a leasehold house?

Chris Salmon, Director

Author:
Chris Salmon, Director