Speaking in front of the Housing Committee this morning, former Labour housing secretary Angela Rayner and former Conservative housing secretary Michael Gove called on ministers to face down the freeholder lobby and move forward with reforms undeterred by fears they will seek a Judicial Review to protect their rights.

Gove said: “For years now [freeholders] have benefited from a system whereby they get money for nothing. 

“That ground rent system is essentially extortion. It should end. 

“The government will end it. I would far rather that it ended on an accelerated timetable, but I recognise that there is only so much that an individual secretary of state can do when financial institutions exercise such a spellbinding hold over Treasury decisionmakers.”

Rayner said: “[You would need] the world’s smallest violin for these organisations who think that ground rent, which is a freebie, is acceptable when people are in these conditions, and we do need to end it.”

While both Gove and Rayner said they hoped that the Leasehold reforms could go further, they both acknowledged the difficulties ministers face.

Rayner said: “I think we have struck the right balance, and I think we should not be kowtowing or taking any lectures on this. 

“I think we’ve got the mandate. 

“I think the previous government went as far as they could in the wash up in terms of the 2024 act, I think we’ve got to switch those on, and I think we’ve got to move at pace.”

Gove refuted arguments from an earlier speaker who is the legal representative of a freeholder group, that reforms to rapidly reduce ground rents to a peppercorn would endanger investor confidence in the UK.

He also hit back at claims that pension funds would be significantly impacted.

Gove said: “Those arguments, no matter how well put, are bogus. 

“So the first thing to say is the impact on pension funds. 

“Overall, pension funds have less than 1% of their investment in residential property. In the UK, that’s residential property overall, never mind in ground rents. 

“So we’re talking about a tiny amount of people’s pension savings invested in this asset class.

He added: “The second thing related to that is concern about spooking or chilling future investment. 

“Again, I think that’s nonsensical. Investors make a judgment about the attractiveness of the United Kingdom overall, according to a variety of factors, and I think that people in the markets are big boys and girls.

“They will know that a government has absolutely every right to say the party is over when it comes to a return with no risk, and those investors will entirely appreciate that there are plenty of other areas, which will be more productive and higher yielding over time.”

Both Rayner and Gove urged ministers not to be deterred by concerns that freeholders seeking a Judicial Review or challenging the reforms with the  European Court of Human Rights, as the government has the backing of Parliament to bring about change.

Rayner dismissed arguments that ground rents were required to pay for essential fire safety remediation as “absolute rubbish”.