Angela Rayner has issued a stark challenge to her own government, demanding it stand up to wealthy investors and deliver meaningful action to cap crippling ground rents for millions of leaseholders.
A Test of Priorities for the Labour Government
The former deputy prime minister and Labour MP for Ashton-under-Lyne warned that the upcoming draft commonhold and leasehold reform bill will fail to move the country on from the "feudal leasehold system" unless it tackles unregulated ground rents. This call comes amid what she describes as a "titanic battle" against furious lobbying from investors seeking to water down the party's manifesto commitment.
Rayner highlighted that at a cabinet meeting last Tuesday, the prime minister powerfully argued for a government that serves those struggling to get by. She now insists the government must prove this by ending the scandal of ground rents, which see homeowners pay hundreds or even thousands of pounds annually for nothing in return.
The Crippling Reality for Homeowners
Rayner outlined the plight of many young families who, despite scrimping to get on the housing ladder, are trapped by these payments. Unlike service charges, leaseholders get nothing in return for ground rent payments. The situation is often worsened by clauses that allow the rent to escalate, sometimes doubling every five to ten years, leaving owners in financial distress and unable to sell or remortgage.
The Competition and Markets Authority has found that nearly 1 million leases contain these onerous, escalating clauses. In some cases, when leases are replaced, the situation deteriorates further with formulas pegged to inflation, leading to huge, unpredictable increases.
Pushing Back Against Investor Pressure
Rayner directly addressed arguments from lobbyists who claim that capping ground rents could risk a backlash from investors, including pension funds. She countered this by stating the system "works just fine for them", providing an annual return for doing nothing.
However, she cited government figures suggesting that less than 1% of UK pension fund assets are dependent on ground rents, an amount she argues is easily absorbable. She described these as niche, unproductive investments that do nothing to grow the economy, contrasting them with productive investments in infrastructure and technology that the government should be incentivising.
Rayner concluded that this battle is a symbol of who the government fights for. "If Labour cannot fix such an obvious injustice... then we shouldn’t be surprised if they lose faith that anything can change," she wrote. The MP called for at the very least an annual cash cap on ground rents, urging her colleagues in government and parliament to "get the job done."
