The National Leasehold Campaign warns that ministers could be on the verge of being “hoodwinked” by lobbyists working on behalf of freeholders into dropping a manifesto pledge to cap ground rents.

The draft Leasehold and Commonhold Reform Bill, which was due to include a cap on ground rents, was delayed last year. 

The NLC says that lobbyists are pressuring the Treasury to block the reforms on the basis that they would have a damaging impact on pension funds that generate income from ground rent investments.

In an opinion piece for The Guardian last week, former housing secretary Angela Rayner wrote: “A titanic battle is raging to prevent us capping crippling ground rents that families have to pay, often to faceless companies. 

“We must fight and win it.”

She added: “This battle is a symbol of so much more. 

“It is about whose side we are on, and who we are in government to fight for.”

Labour MP Justin Madders also warned on the BBC last week that the government would face mass rebellion by party members if it dilutes leasehold reforms.

The NLC says the argument that capping ground rent would deter pension fund investment is not supported by evidence. 

It says: “The Department for Levelling Up, Housing and Communities has previously noted that less than 1% of total UK pension fund assets are estimated to be invested in residential ground rents. 

“During discussions on the potential impact of capping existing ground rents, the department suggested any negative effect on pension funds would be ‘within normal investment and depreciation tolerances’.”

By contrast, the NLC claims the impact of ground rents on the UK’s 5.3 million leaseholders is significant, but that it is “money for nothing”.

It says: “Ground rents represent a recurring financial burden that brings stress, anxiety and insecurity into people’s homes. 

The NLC adds: “The UK Competition and Markets Authority has stated that ground rent obligations are neither legally nor commercially required.”