The government’s decision to cap ground rents and move towards their eventual abolition could have a significant and long-overdue impact on thousands of people across Dorset, where leasehold properties are common in coastal towns, new developments and retirement housing.
Housing Secretary Steve Reed has confirmed that ground rents for existing leaseholders will be capped at £250 a year from 2028, before falling to a nominal “peppercorn” rent after 40 years. Describing ground rents as a “scam” and a “racket”, Mr Reed said the reforms would ultimately lead to their abolition altogether.
For many Dorset residents, that language will resonate.
A county shaped by leasehold
Leasehold is particularly prevalent in Dorset’s urban and coastal areas, including Bournemouth, Poole, Weymouth and parts of Christchurch. Flats along the seafront, town-centre apartment blocks, and a growing number of modern housing developments are sold leasehold, meaning homeowners do not own the land their property sits on and must pay ground rent to a freeholder for no service in return.
In some cases, Dorset leaseholders have faced escalating ground rents written into contracts, making homes harder to sell, remortgage or pass on. Campaigners have long argued that the system traps people in unfair agreements they did not fully understand when buying their homes.
The new cap means that nearly five million leaseholders nationally will never pay more than £250 a year in ground rent, and almost a million will see their bills fall. For Dorset households on fixed or modest incomes — particularly pensioners — that could offer real financial relief.
Relief for retirees and first-time buyers
Dorset has one of the highest proportions of older residents in England, and many live in leasehold retirement flats. For years, some have complained about being hit with ground rents, service charges and opaque fees long after they believed they had secured a stable home for later life.
Capping ground rents, scrapping forfeiture (which allowed people to lose their homes over relatively small debts), and giving leaseholders the right to switch to commonhold could dramatically rebalance power away from freeholders and managing agents.
For younger residents and first-time buyers — already struggling with high house prices and rents — banning new leasehold flats may also prevent a new generation from being locked into what critics describe as a feudal system.
Commonhold and local control
The reforms also promise to revitalise commonhold, a system that allows homeowners to own their flats outright while jointly managing their building. In theory, this could be transformative for Dorset communities, giving residents more say over maintenance, safety works and service charges — issues that have caused repeated disputes in apartment blocks across the county.
The government has also pledged further action on service charges, often labelled “fleecehold” by campaigners, following a consultation launched last summer. For Dorset leaseholders who say they pay large sums without clear explanations, further reforms cannot come soon enough.
Not without controversy
Not everyone is welcoming the changes. The Residents Freehold Association has warned that capping ground rents interferes with property rights and could damage investor confidence, potentially affecting building safety projects and management services.
There are also political tensions within the government, with concerns that pension fund investors may be deterred. However, previous government figures suggested that less than 1% of pension fund assets are tied up in residential ground rents.
Opposition parties, including the Liberal Democrats and Greens, argue the reforms do not go far enough and are calling for the complete abolition of leasehold.
A historic shift — with real local consequences
For Dorset, the reforms represent more than a technical change to housing law. They mark a shift away from a system that many residents feel has treated homeownership as a financial extraction exercise rather than a basic right.
If delivered in full, the changes could reduce costs, improve security, and give thousands of Dorset homeowners more control over their homes and their lives. After decades of campaigning, leaseholders across the county may finally be seeing the beginning of the end of a system widely viewed as outdated, unfair and indefensible in the 21st century.
