Angela Rayner has urged Prime Minister Keir Starmer to honour Labour’s pledge to cap ground rents for leaseholders in England and Wales, as divisions deepen within the cabinet over leasehold reform.
Rayner has stepped into a dispute between housing secretary Steve Reed and chancellor Rachel Reeves about whether the government should proceed with plans to limit ground rents for existing leaseholders. The proposal was part of a draft leasehold reform bill that was expected last year but was delayed after concerns from the Treasury that a cap could discourage property investors.
Government sources say Starmer is expected to make a final decision on Tuesday, amid growing pressure from Labour MPs to publish the long-delayed bill.
Rayner said escalating ground rents have pushed many homeowners into financial difficulty and made it hard for them to sell or remortgage their homes. She warned that Labour’s manifesto promise to fix the system is being undermined by lobbying from wealthy investors.
Rayner argued that opponents of reform are protecting a system that benefits investors, including pension funds, while leaving families to face rising and opaque charges. “They get an annual return for doing absolutely nothing,” she wrote, accusing freeholders of acting with little accountability.
Labour’s manifesto pledged to end what it called the “feudal leasehold system”, including banning the sale of new leasehold flats and tackling unaffordable ground rents.
Housing minister Matthew Pennycook has been leading work on the draft bill, which includes a proposal to cap ground rents for existing leaseholders at £250 a year. Under legislation passed by the previous Conservative government, new leasehold homes must already be sold with nominal, or peppercorn, ground rents.
The bill was expected to be published in December but was delayed after Treasury officials warned it could affect pension funds that own freehold properties.
With an estimated 5 million leasehold homes in England, Labour MPs have voiced increasing frustration. Ruth Cadbury, one of several MPs pushing for action, said she hoped the bill would be published soon, adding that leaseholders were disappointed by the delay and anxious for progress.
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