Peppercorn Ground Rent – What is it?

When purchasing a leasehold property it can be subject to a ‘peppercorn’ ground rent charge, it is a benefit to the freeholder/landlord. As this is part of the lease it is legally binding and cannot be changed. Peppercorn is a rent that is of very minimal value, usually £5/10 per year. It cannot be removed from the title and will run for eternity. In some cases, ground rent is subject to an annual review and can increase. In some cases, ground rent is not collected at all and may have not been for many years especially when there is a historic lease, in these circumstances your solicitor will often request that 6 years of ground rent payments be retained so that if you are ever called upon to pay towards the payment of ground rent then you are reimbursed somewhat by the seller and all contributions do not fall on you.