Peppercorn rent
The term ‘leasehold’ in property law describes a lease from the freeholder of a property that enables the leaseholder to use the property for a specified period subject to conditions set out in the lease in return for the payment of rent. At the end of the lease the premises revert to the freeholder.
Generally, in order for a lease to be enforceable, a ground rent (valuable consideration) is paid by the leaseholder to the landlord. However, historically, as the amounts payable were typically very small, some freeholders asked for peppercorns rather than money, with a phrase in the lease such as, ‘...a yearly rent of one peppercorn, if demanded’, effectively meaning that there was nothing to collect.
This has given rise to the term ‘peppercorn lease’. The phrase is now also used more generally to mean an amount that is small or insignificant, for example a ‘peppercorn payment’ for the sale of something that has little monetary value.
Ground rent is still charged by landlords, and is a condition of most leases. Ground rent is usually a small amount, typically £50 to £300 a year. If the amount is very small, or notional, it may be described as a peppercorn rent.
If a leaseholder extends a lease under the Leasehold Reform, Housing and Urban Development Act 1993 they then only have to pay a ‘peppercorn rent’, effectively a ground rent of nothing. If a lease is extended by negotiation however, ground rent may still be payable.
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
OpenUSD possibilities: Look before you leap
Being ready for the OpenUSD solutions set to transform architecture and design.
Global Asbestos Awareness Week 2025
Highlighting the continuing threat to trades persons.
Retrofit of Buildings, a CIOB Technical Publication
Now available in Arabic and Chinese aswell as English.
The context, schemes, standards, roles and relevance of the Building Safety Act.
Retrofit 25 – What's Stopping Us?
Exhibition Opens at The Building Centre.
Types of work to existing buildings
A simple circular economy wiki breakdown with further links.
A threat to the creativity that makes London special.
How can digital twins boost profitability within construction?
The smart construction dashboard, as-built data and site changes forming an accurate digital twin.
Unlocking surplus public defence land and more to speed up the delivery of housing.
The Planning and Infrastructure Bill
An outline of the bill with a mix of reactions on potential impacts from IHBC, CIEEM, CIC, ACE and EIC.
Farnborough College Unveils its Half-house for Sustainable Construction Training.
Spring Statement 2025 with reactions from industry
Confirming previously announced funding, and welfare changes amid adjusted growth forecast.
Scottish Government responds to Grenfell report
As fund for unsafe cladding assessments is launched.
CLC and BSR process map for HRB approvals
One of the initial outputs of their weekly BSR meetings.
Building Safety Levy technical consultation response
Details of the planned levy now due in 2026.
Great British Energy install solar on school and NHS sites
200 schools and 200 NHS sites to get solar systems, as first project of the newly formed government initiative.
600 million for 60,000 more skilled construction workers
Announced by Treasury ahead of the Spring Statement.