Commonhold and Leasehold Reform

Angela Rayner Excerpts

Tuesday 27th January 2026 Commons Chamber

[Matthew Pennycook]

I thank the Liberal Democrat spokesman for those questions. He often mentions Lloyd George, and I share his passion for Lloyd George’s radicalism on property law and other measures. I will address the specific points that he raised. During the passage of the Leasehold and Freehold Reform Act 2024, I was clear that my instinctive preference when it comes to ground rents was for a peppercorn cap, fully eliminating ground rents. The changes that we are making ensure that, after 40 years, that change occurs.

Having considered all the analysis and advice available to me as a Minister, including the evidence gathered in response to the previous Administration’s 2023 consultation, I believe that we have set out the right policy. It is clear that an immediate peppercorn cap would carry significant risks, including some that might impact on leaseholders. The Government also recognise that there is a significant difference between regulating the creation of new leases, and intervening to affect existing contracts and investments.

On the functioning of the cap itself, I want to make clear that it is a maximum cash cap. If someone’s lease is below £250 and does not include escalating clauses, their ground rent will not rise to £250. If someone’s ground rent is over £250, at the point that the measures are brought into force they will see an immediate reduction. That will benefit millions of leaseholders across the country. It is a huge cost-of-living intervention, and I hope the House can get behind it as the most just and proportionate way of addressing unregulated and unaffordable ground rent terms.

The hon. Member for Taunton and Wellington (Gideon Amos) will know that we ran a consultation last year on how we can standardise service charges and increase their transparency to ensure that leaseholders can better challenge the reasonableness of service charges at tribunal. However, we do not intend to bring forward a cap, not least because doing so could harm leaseholders, particularly those in enfranchised buildings, who may need to raise sums beyond the cap to carry out essential maintenance works on their buildings.

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I thank my hon. Friend for this extremely welcome statement. I know how much work he has put into this. We know, however, that vested interests have repeatedly resorted to lawfare to block such measures, and may do so again; we have already seen the scaremongering begin, with outrageous claims that these changes will impact on lifesaving building safety work. Can my hon. Friend reassure me that the Government will not waver in the face of such threats, but stand firm and ensure that the will of this Parliament prevails? I take exception to objections from those on the Opposition Benches, who did nothing on rent caps in their time in Parliament.

[Matthew Pennycook]

I thank my right hon. Friend for her kind words. She was an incredible champion of the reform agenda for this legislation when she served as Secretary of State. She raises the matter of vested interests. I hope that the House—and you, Mr Speaker—will take from the Government’s robust defence to the legal challenge brought against the 2024 Act by a group of claimants who are owners of freehold and other arising interests of dwellings that we will robustly defend the legislation. The High Court, incidentally, comprehensively dismissed that challenge, allowing us in due course to take forward the relevant provisions. I simply say to my right hon. Friend—who embodies this herself, so she is well aware—that taking on vested interests that are opposed to change that will bring about improvements in the lives of working people is what Labour Governments do.