Deputy Prime Minister Angela Rayner has warned of a “titanic battle” over Labour’s manifesto pledge to cap ground rents, as ministers face intense lobbying from wealthy investors opposed to reform. In a strongly worded article, Rayner argued that the government must stand up for leaseholders who face crippling and escalating charges, often paid to faceless overseas companies.
Rayner highlighted that nearly one million leases contain onerous ground-rent clauses identified by the Competition and Markets Authority, with some doubling every five to ten years. She described the charges as an “unearned income stream” that leaves families in financial distress and unable to sell or remortgage their homes. Labour has already introduced new protections through the Employment Rights Act and Renters’ Rights Act, and now aims to tackle ground rents in the forthcoming leasehold and commonhold reform bill.
However, the proposal has sparked a backlash from investors, including pension funds, who argue that capping ground rents could deter investment. Rayner dismissed these concerns, noting that UK pension fund assets dependent on ground rents represent less than one per cent of the total and are “easily absorbable”. She argued that redirecting investment into productive assets such as infrastructure and technology would promote economic growth.
The minister stressed that if Labour fails to deliver on its promise, it risks undermining public faith in the government’s ability to tackle injustices. “If Labour cannot fix such an obvious injustice … then we shouldn’t be surprised if they lose faith that anything can change,” she wrote.
