Quid pro quo leases and the ground rent cap

From:: Ministry of Housing, Communities and Local Government
Published: 2 July 2026

Applies to England and Wales

Summary

We are seeking views on whether 'quid pro quo' leases should be exempt from or treated differently in the government's proposed cap on ground rents in residential leases.

This consultation closes at
11:59pm on 27 August 2026

Consultation description

In the Commonhold and Leasehold Reform Bill, the government is legislating to cap ground rents at £250 per year, changing to a peppercorn after 40 years.

We are considering an exemption to this policy for ‘quid pro quo’ leases. This is where a higher ground rent is agreed between the leaseholder and freeholder for a corresponding reduction in premium.

This consultation seeks views on:

whether there should be an exemption
how it should be defined
how it should work

We are also seeking evidence from those who have agreed a quid pro quo lease or have professional experience of this area.

Documents