Ground Rent Reform: Consultation And Comment

Ground rent investment strategies have grown significantly in recent decades, and it is presently estimated by the Residential Freehold Association that UK pension funds have more than £15bn invested in residential ground rents.

In the low yield environment that dominated following the global financial crisis, until recent interest rate increases, the long term and predefined cash flows of ground rent investments enabled financial institutions such as pension funds to match long duration liabilities with a return which, at that time, represented an attractive return relative to fixed income investments./p>

In an inflationary environment, ground leases can also provide a degree of inflation protection, often featuring inflation-linked payment obligations (such as RPI or CPI linked increases). These attributes resulted in a number of long income and ground lease investment funds being launched in the UK targeting institutional investors, such as pension funds, many