Finance
UK asset manager M&G expects 230-million-pound hit from Leasehold Reform Bill
Published by Global Banking and Finance Review
Posted on January 27, 2026
1 min readLast updated: January 27, 2026
Quick Summary
M&G warns of a £230 million impact from the UK's Leasehold Reform Bill, which will cap ground rents and affect over 5 million leaseholders.
M&G Anticipates £230 Million Impact from Leasehold Reform Bill
Impact of the Leasehold Reform Bill
Jan 27 - UK asset manager M&G on Tuesday warned of a 230 million pound ($314.32 million) one-off hit from the government's proposed property overhaul once the measures take effect, citing an exposure of 722 million pounds to ground rent assets.
Details of the Proposed Overhaul
Prime Minister Keir Starmer said on Tuesday that Britain will cap ground rents at 250 pounds ($342) a year in an overhaul of its antiquated property system.
Financial Implications for M&G
M&G said that the proposed property overhaul, which it expects to take effect in 2028, would result in a 15 million pound reduction of its adjusted operating profit.
Market Reaction
The reform will apply to more than 5 million leaseholders in England and Wales and will ultimately reduce permitted ground rents to a nominal "peppercorn" after 40 years, the government said in a statement.
Shares of the asset manager were marginally down in early trading.
($1 = 0.7317 pounds)
(Reporting by Sri Hari N S in Bengaluru; Editing by Janane Venkatraman and Harikrishnan Nair)
Key Takeaways
- •M&G anticipates a £230 million hit from the Leasehold Reform Bill.
- •The reform will cap ground rents at £250 annually.
- •M&G's adjusted operating profit may reduce by £15 million.
- •The reform affects over 5 million leaseholders in England and Wales.
- •Shares of M&G saw a slight decline following the announcement.
Frequently Asked Questions about UK asset manager M&G expects 230-million-pound hit from Leasehold Reform Bill
1What is the Leasehold Reform Bill?
The Leasehold Reform Bill is a proposed legislation in the UK aimed at reforming the leasehold property system, including capping ground rents and changing the rules around leasehold agreements.
2What is ground rent?
Ground rent is a fee paid by leaseholders to the freeholder of a property, typically on an annual basis, for the land on which the property is built.
3What is adjusted operating profit?
Adjusted operating profit is a measure of a company's profitability that excludes certain non-recurring items, providing a clearer view of ongoing operational performance.
4What are financial implications?
Financial implications refer to the potential effects or consequences that a decision or event may have on a company's financial performance or position.
5What is a one-off hit in finance?
A one-off hit refers to a significant financial impact that occurs only once, rather than being a recurring expense or loss.
