It comes after former Housing Secretary Angela Rayner urged the government to stick to its manifesto pledge and cap ground rents, external.
Ministers had promised a draft bill would be published before the end of the year, aimed at reforming the leasehold system in England and Wales and moving towards abolishing it.
However this was delayed, with the issue of ground rents believed to be behind the hold up.
There are around five million leasehold homes, where people own the right to occupy the property via a lease for a certain number of years from a freeholder.
Ground rents – which can often be hundreds of pounds a year – were abolished for most new residential leasehold properties in England and Wales in 2022 but they remain for existing leasehold homes.
It is common for a lease to include a clause that the ground rent increases by a certain percentage or RPI inflation at fixed intervals, which can make it difficult to sell or get a mortgage for a property.
In 2024, when Labour was in opposition, the current Housing Minister Matthew Pennycook said his preference was for ground rents to be capped at a peppercorn rate – meaning a nominal sum such as £1 a year.
However, campaigners now believe a cap of £250 a year is more likely.
Some reports have suggested there are divisions between the Treasury and housing department over the issue, with officials concerned about the impact of a cap on pension funds which own freehold properties.
Treasury sources acknowledged there were difficulties over where to draw the line over annual charges.
But they played down the idea of tensions between departments and said ministers were trying to strike the right balance.