Daily Mail<\/a> for some pension funds \u201cthe long-established ground rents system may have been relied upon too heavily\u201d.<\/p>\nGround rent is the fee leasehold homeowners pay for the land beneath their buildings.<\/p>\n<\/p>\n
This is paid to a freeholder who owns the building and the land it is built on.<\/p>\n
A spokesperson for the Association of British Insurers (AB) also voiced reservations over the plans.<\/p>\n
They said: \u201cWe support proportionate leasehold reform but pension funds \u2013 like the rest of the financial services industry \u2013 require predictable and stable rule of law if they are to have the confidence to invest.<\/p>\n
\u201cWe are deeply concerned that retrospective changes to existing property rights set a troubling precedent and undermine confidence in contract certainty.<\/p>\n
\u201cIt is likely to raise the risk premium that investors attach to the UK and could weaken its appeal as a destination for global capital and the domestic market.\u201d<\/p>\n
Danny Pinder, from the British Property Federation, added: \u201cWhile we agree that rapidly escalating ground rents should be addressed, the proposed cap will interfere with investments made by pension funds and institutional investors over many years and undermine the Government’s pursuit of investment in this country.<\/p>\n
\u201cThe various documents published by the Government today make clear that these changes will have an impact on freeholders \u2014the value of their assets and their ability to match index-linked pension liabilities \u2014 but that they intend to proceed, nonetheless.\u201d<\/p>\n
The Residential Freehold Association (RFA) \u2014 a trade body representing professional freeholders \u2014 said the ground rent cap is \u201cwholly unjustified\u201d.<\/p>\n
A spokesperson said the cap \u201cwould seriously damage investor confidence in the UK housing market and send a dangerous and unprecedented signal to the wider institutional investment sector\u201d.<\/p>\n
![\"PM](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/01\/london-england-british-prime-minister-keir-starmer-speaks-as-he-hosts-representatives-of-the-6704516.jpeg\" "\\"PM")
<\/p>\n
The PM said people told him the change will ‘make a difference to them worth hundreds of pounds’ (Image: Getty)<\/p>\n
Others supported the move, including the Association of Leasehold Enfranchisement Practitioners which said the draft bill is a step towards modernising tenure structures in England and Wales.<\/p>\n
Paula Higgins, chief executive of HomeOwners Alliance, said: \u201cThe financial sector and vested interests should now step aside and allow these reforms to go unchallenged. Time has been called on treating homeowners as a lucrative income stream.\u201d<\/p>\n
Ministers estimate about 770,000 to 900,000 leaseholders pay more than \u00a3250 a year.<\/p>\n
Last year alone, leaseholders paid more than \u00a3600 million in ground rents and they are expected to save up to a combined \u00a312.7 billion in total over the entire lease term due to the cap, according to the Government.<\/p>\n
The ground rent cap could come into force in late 2028.<\/p>\n
Under the draft Commonhold and Leasehold Reform Bill, ground rent will be capped at \u00a3250 a year and be reduced effectively to zero after 40 years.<\/p>\n
The Government said the shake-up will see many leaseholders save more than \u00a34,000 over the course of their lease, with more than five million leaseholders and future homeowners benefiting from stronger control, powers and protections.<\/p>\n","protected":false},"excerpt":{"rendered":"PM Sir Keir Starmer (Image: Getty) Sir Keir Starmer has been warned his plan to introduce a cap…\n","protected":false},"author":2,"featured_media":438537,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,7672,3730,147,530,32369],"class_list":{"0":"post-438536","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-keir-starmer","10":"tag-labour-party","11":"tag-personal-finance","12":"tag-personalfinance","13":"tag-renting"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/438536","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=438536"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/438536\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/438537"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=438536"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=438536"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=438536"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"PM](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/01\/staffordshire-united-kingdom-labour-leader-sir-keir-starmer-delivers-a-speech-and-takes-media-670446.jpeg\" "\\"PM")
<\/p>\n![\"Riverside](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/01\/riverside-apartment-blocks-at-battersea-reach-in-london-6704477.jpg\" "\\"Riverside")
<\/p>\n