Angela Rayner has publicly called on Prime Minister Keir Starmer to honour a key election pledge to cap ground rents for millions of leaseholders, as a significant cabinet division over the controversial policy reaches a critical point.
Cabinet Clash Over Ground Rent Cap
The former deputy prime minister has stepped into a tense standoff between Housing Secretary Steve Reed and Chancellor Rachel Reeves. The dispute centres on whether the government should proceed with its manifesto commitment to limit annual charges for existing leaseholders in England and Wales.
The proposed measure was part of a draft leasehold bill scheduled for publication last year. Its release was delayed after Treasury officials, and the Chancellor, raised concerns that capping ground rents could deter property investors and negatively impact pension funds which hold freehold assets.
Pressure Mounts on Starmer to Decide
Government insiders indicate that Keir Starmer is expected to make a final decision between his ministers on Tuesday. This comes amid mounting pressure from Labour backbenchers, who are demanding the draft bill be published without further delay.
In a direct intervention, Rayner wrote in The Guardian that ordinary homeowners have been saddled with "high and escalating" ground rents, causing financial distress and making it difficult for them to sell or remortgage their properties.
She accused "wealthy investors" of furious lobbying to water down the manifesto commitment, arguing the current system works perfectly for those who "get an annual return for doing absolutely nothing."
The Stakes of the Leasehold Promise
Labour's election manifesto vowed to "finally bring the feudal leasehold system to an end," which included banning new leasehold flats. It explicitly promised to tackle "unregulated and unaffordable ground rent charges."
Housing Minister Matthew Pennycook has been developing the draft legislation, which includes a measure to cap ground rents at £250 a year for current leaseholders. This builds on previous Conservative legislation mandating peppercorn rents for new leaseholds.
The delay has frustrated many Labour MPs, given the scale of the issue. There are an estimated 5 million leasehold homes in England alone. MP Ruth Cadbury expressed the sentiment of many, stating her constituents were "disappointed" the bill hadn't been published and hoping it would emerge soon.
The Prime Minister's upcoming decision will therefore be a crucial test of his government's commitment to its core pledges and its ability to navigate internal divisions on major domestic policy.
