Ground Rents Income falls after failed attempt to stop gov reforms

Shares in Ground Rents Income (GRIO) fell 20.8% today following government reforms on home ownership.

Prime minister Kier Starmer announced that ground rents paid by leaseholders will be capped at £250 a year, sending the Schroders-managed fund into a tailspin.

The share price of the £23m real estate investment trust hit a low of 19p by 2.40pm, marking a steep loss from yesterday’s 24p close.

Chris Leek’s fund attempted to stop the reforms last year, launching a judicial review against the government alongside five other claimant groups.

GRIO’s grievances began with the previous Conservative government, which sought to abolish ground rents on new leases in 2017. Their proposals, however, did not affect existing properties.

The trust’s share price peaked at just over 140p in March of that year and has been in gradual decline since, down around 85% from its apex.

When the law eventually came into place following much deliberation in 2024, it did not confirm that the changes would be restricted purely to new builds.

It was then that GRIO launched legal action against the government on the grounds that the act was unlawful, which culminated in a four-day hearing due in July 2025. Their plea was later dismissed by the High Court in October last year.

Chris Leek’s fund went into wind-down mode in 2023 when it became evident that the government’s reforms would damage its investment thesis.

Selling assets has been challenging, with improved building safety standards following the Grenfell Tower tragedy leading to upgrades being required at some of the trust’s sites.

GRIO rejected a £32.5m takeover bid by Victoria Property at the start of last year, saying that it ‘wholly undervalues’ the portfolio. It asked the firm to review its offer, but Victoria Property withdrew its interest shortly after.