Peppercorn Rent
A nominal or nil rent — traditionally one peppercorn a year — that has no real financial value. Ground rent on most new long residential leases has been restricted to a peppercorn since the Leasehold Reform (Ground Rent) Act 2022.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
A peppercorn rent is a token rent charged under a lease that has no meaningful monetary value; historically the term derives from leases that literally reserved a single peppercorn a year, sufficient to keep the arrangement a lease in law without imposing a real financial burden on the tenant. Since the Leasehold Reform (Ground Rent) Act 2022 came into force, GOV.UK guidance confirms that 'ground rent in most new leases cannot legally be for anything more than "one peppercorn per year"'.
GOV.UK guidance explains that 'This "peppercorn rent" means that no money can be legally charged or paid as ground rent on leases regulated by this Act', and freeholders are additionally banned from charging administration fees for collecting it. The restriction applies to new, qualifying long residential leases in England and Wales granted after the Act's commencement, with limited exceptions such as community-led housing and certain business leases; existing leases granted before commencement are not affected.
Related terms
Official sources
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