Angela Rayner, former deputy prime minister, has urged Keir Starmer to uphold Labour’s commitment to capping ground rents for leaseholders in England and Wales, amid rising tensions within the cabinet over the future of the leasehold system.
The former deputy prime minister has intervened in a dispute between Housing Secretary Steve Reed and Chancellor Rachel Reeves, who are reportedly at odds over whether to maintain Labour’s pledge to limit annual charges for existing leaseholders.
Government insiders suggest that Starmer will soon have to make a decision between the two ministers, as pressure mounts from Labour MPs calling for the draft bill to be published without further delay.
Rayner emphasised in a Guardian article that ordinary homeowners have been burdened over decades with escalating ground rents, leaving many financially constrained and in some cases unable to sell or remortgage their properties.
She warned that ministers are facing intense lobbying from wealthy investors who want to weaken Labour’s promise, arguing that the current system benefits investors while placing ordinary families under financial strain.
“Investors gain annual returns for minimal effort, raising ground rents and service charges without transparency, often causing severe financial pressure on leaseholders,” Rayner wrote.
Labour’s 2019 manifesto included a clear pledge to end the leasehold system, banning the sale of new leasehold flats, and addressing the issue of unregulated and unaffordable ground rent charges.
Housing Minister Matthew Pennycook has been working on the draft bill since Labour entered government, including plans to cap ground rents at £250 per year for existing leaseholders. New leasehold homes are already required to be sold with nominal or “peppercorn” ground rents under legislation introduced by the previous Conservative government.
Rayner, who also served as housing and local government secretary before leaving government last year, had supported Pennycook throughout much of this process. She resigned after admitting to underpaying property taxes on a new home in Hove, East Sussex.
The draft legislation was due for publication in December, but Treasury officials raised concerns that the cap on ground rents could affect pension funds holding freehold properties, leading to a last-minute delay.
Labour MPs have voiced frustration over the postponement, highlighting that approximately five million leasehold homes across England could be impacted by the legislation, making timely action crucial.
Ruth Cadbury, a Labour MP, told the Guardian that maintaining momentum on the bill is essential, and she urged the government to publish it promptly to reassure leaseholders who have been waiting for reform.
Cadbury added that constituents and MPs campaigning on this issue were disappointed by the delay, and there is growing concern that prolonged inaction may undermine public trust in Labour’s promises.
Rayner’s intervention reflects the broader tension within the party between protecting the rights of leaseholders and managing the concerns of institutional investors, including pension funds, who benefit from the current system.
The coming weeks are likely to be decisive, as Starmer considers whether to enforce the promised ground rent cap or make concessions to investors, which could dilute the original pledge but appease powerful financial interests.
Leaseholders across England and Wales are watching closely, as the decision will determine whether Labour honours its manifesto commitment to protect homeowners from excessive ground rents and financial insecurity.
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