Ground rent is an annual sum of money paid to a landlord or landowner by a leaseholder in order to occupy a leased property.
It’s been around for centuries, with the earliest form known to date back to Anglo-Saxon times when it was used as a form of taxation by royalty. In more recent centuries it has become a common feature of rental agreements and leases, with most leases now including some amount of ground rent that needs to be paid each year.
This can vary from just a nominal amount for small residential properties to significantly larger amounts for commercial buildings and large estates. The purpose of ground rent is twofold – firstly it acts as an income stream for the landlord, while secondly it helps protect their investment by ensuring the tenant keeps up payments on their lease agreement.
