Burnham denies ‘simply untrue’ claim he was told in advance he would be rejected as Labour byelection candidate – live

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'Death knell for leaseshold' - campaigner welcomes ground rents being capped

Other lawyers have welcomed the leasehold reform plans.

This is from Gary Scott, a property litigation Partner at the London law firm Spector Constant & Williams.

The UK government’s newly announced cap on ground rents will, in practice, materially affect a relatively small minority of leaseholders, likely less than 25% of all those with a ground‑rent obligation. Current government estimates indicate that around 770,000 to 900,000 leaseholders pay more than £250 per year, out of approximately 3.8m leasehold properties that still carry a ground‑rent charge.

While this means the vast majority of leaseholders will see no direct financial change from this measure, for the much smaller group of leaseholders still burdened by onerous, doubling, or investment‑linked ground rents, the impact will substantial.

These leaseholders often face difficulties remortgaging, selling, or affording their homes due to ground‑rent terms that have been widely acknowledged as unfair and sometimes financially hazardous. The cap therefore represents a targeted but meaningful intervention, resolving some of the most acute cases of ground‑rent exploitation and bringing relief to those who have been disproportionately affected by historic leasehold practices.

And this is from Liam Spender, a lawyer involved in the Leaseholder Action group.

The £250 ground rent cap sounds the death knell for leasehold in England and Wales.

Some will no doubt be disappointed that ground rents are not being eliminated immediately and are instead being phased out over 40 years. However, crucially the cap will make it cheaper for people to buy the freehold and to extend their leases, both of which are priced by reference to ground rent values.

Leasehold reform plans will weaken UK's appeal as 'destination for global capital', insurance industry claims

The ABI (Association of British Insurers), which says it represents an industry managing investments worth £1.4tn (trillion) says the government plans to cap ground rents will weaken the UK’s appeal as a destination for global investment.

An ABI spokesperson said:

We support proportionate leasehold reform but pension funds – like the rest of the financial services industry – require predictable and stable rule of law if they are to have the confidence to invest.

We are deeply concerned that retrospective changes to existing property rights set a troubling precedent and undermine confidence in contract certainty. It 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.

TheCityUK, a trade group representing the financial services industry, has also made the same point. This is from John Godfrey, its managing director for policy, public affairs and research.

The industry recognises and supports the need to address remaining egregious ground rents, but a blanket cap of £250 decimates a long-established asset class and will impact the value of people’s pension savings. Retrospectively re-writing contracts in this way undermines the UK’s reputation for certainty and as a market which respects the rule of law and sends a strongly negative message to firms considering investing in the UK, whether in housing, infrastructure, or other asset classes.

And this is from Balraj Birdi, real estate partner and head of living investment at the law firm Eversheds Sutherland.

The draft commonhold and leasehold reform bill is a major shift in how long‑term property ownership is structured in England. The headline is a £250 cap on ground rents for 40 years before dropping to a peppercorn, which will be welcome news for leaseholders facing escalating costs. However, this isn’t a small tweak as it effectively removes long‑standing contractual rights that pension funds and ground‑rent investors have relied on, reducing asset values overnight and raising questions about future investment in new housing.

In Treasury questions Dan Tomlinson, a Treasury minister, has just confirmed that he will make a ministerial statement later about the government’s support package for pubs facing higher business rate costs.

Tomlinson will give his statement at about 1.30pm, after a statement at about 12.30pm from Matthew Pennycook, the housing minister, about the draft commonhold and leasehold reform bill.

Burnham rejects claim he was told by No 10 in advance that, if he applied to be byelection candidate, he would be blocked

This morning Robert Peston, ITV’s political editor, said he had been told by a “source close to the PM” that Andy Burnham “was informed in no uncertain terms that he would be repulsed” if he applied to be the candidate in Gorton and Denton. Peston said No 10 “therefore interpret his application as an explicit attempt to destabilise Starmer and sow dissent, rather than – which he claims – see off the threat from Reform”.

Responding to Peston’s post on social media, Burnham said:

This is simply untrue.

Peston then posted a follow-up message saying that he had spoken to a second insider source saying that the first one was wrong and Burnham was right.

Andy Burnham, mayor of Greater Manchester, says it is untrue he was given advance warning that the NEC committee would reject his application to stand in Gorton and Denton. Source: “Andy Burnham is seeking an urgent call with No 10 about the briefing which he says is untrue and breaks a commitment given to him by the PM.”

This is all getting surreal. Another source close to the PM disputes what my original source close to the PM says about Burnham being warned not to bother to apply to be a candidate in the by election. Just so you know (and yes it is faintly ridiculous)

Who knows quite what was said? But what is clear is that, without picking up the phone to No 10, Burnham should have known towards the end of last week just by reading the Guardian that there was no chance Starmer was going to let him bee Labour’s candidate. This is what Jessica Elgot wrote in her analysis on Thursday.

[Burnham] faces the challenge of getting selected by a panel of the party’s ruling national executive committee. Four NEC members who spoke to the Guardian gave his chances of being selected by that body as “zero”.

Starmer and Burnham have personal animosity, but that is nothing compared with the cold fury that senior figures in No 10 feel towards Burnham for what they see as his openly planning a coup against the prime minister.

Wes Streeting, the health secretary, brought his party umbrella to Downing Street this morning. Maybe he was inspired by Angela Rayner’s speech about being “unapologetically Labour”. (See 9.27am.)

Wes Streeting leaving No 10 after cabinet this morning. Photograph: Stefan Rousseau/PA

Manchester city council leader Bev Craig rules out standing to be Labour's candidate in Gorton and Denton

Some Labour figures have already given up hope of the party winning the Gorton and Denton byelection, the Times reports. In its overnight story, it says:

A senior government figure told The Times: “Realistically we know that we’re going to lose. But it was a question of what was worse: losing a by-election or losing control of Greater Manchester, which would have been a total disaster.

The Labour MP John Slinger has criticised this sort of briefing. In a post on social media commenting on this quote, he said:

Labour people should be booking their train to the Gorton & Denton by-election and knocking on doors in support of whoever is selected and our party, not speculating about losing or perpetuating the psychodrama.

At one stage there was speculation that Bev Craig, the Labour leader of Manchester city council, might apply to be Labour’s candidate. Last night she ruled herself out. She said:

It’s a privilege to lead such an incredible city and our @McrLabour Council. Building a better city & delivering for Mancunians.

I rarely comment on internal Labour matters but I am not seeking selection for the by-election. I will be working damn hard to elect a Labour MP

As Dave Burke reports for the Daily Mirror, the Reform UK MP Lee Anderson posted a picture on social media of himself and activists campaigning in the Gorton and Denton byelection – standing outside a hotel that is actually in Angela Rayner’s neigbouring Ashton-under-Lyne constituency. Rayner told the paper: “Farage’s Reform can’t even find the Gorton and Denton constituency on a map. Perhaps it’s because they’re too busy filling their party full of former Tories who failed the country.”

Mala Tribich (centre, with David Lammy sitting on her left and Keir Starmer on her right), a Holocaust survivor, addressing a cabinet meeting this morning to mark Holocaust Memorial Day. Photograph: Alastair Grant/PA

Freehold investors should get compensation for ground rents being capped, says British Property Federation

The British Property Federation has said that the government’s plan to cap ground rents could discourage investment into the UK. It is also saying that landlords should get compensation. In a response to the announcement this morning (see 8.57am), Danny Pinder, director of policy at the BPF, said:

While 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. The various documents published by the government today make clear that these changes will have an impact on freeholders – the value of their assets and their ability to match index-linked pension liabilities – but that they intend to proceed, nonetheless. We have long been clear that adequate compensation must be provided to these entities as they have invested in good faith in order to meet their liabilities and continue to fund everyone’s pensions – today’s announcements is silent on that point …

There are billions of pounds invested in large-scale residential and mixed-use developments, and it is essential that reform is mindful of the rights of property owners as well as leaseholders. In our legal system contract is sacrosanct and legislative changes that cut across and undermine existing commercial agreements will raise the risk premium that investors attach to the UK at a time when the government is seeking to attract domestic and private capital for its growth agenda.

Lib Dems call for 'absurd, feudal system of leasehold' to be abolished for good

Like the Greens (see 9.09am), the Liberal Democrats are also saying leasehold should be abolished for good. This is from Gideon Amos, the Lib Dem housing spokesperson, commenting on the government’s announcement this morning.

This news will come as a relief for thousands of leaseholders who have had their finances wrecked by spiralling ground rents.

But the government cannot call this job done. Liberal Democrats demand an end to the absurd, feudal system of leasehold for good.

People are being fleeced by a system that restricts their rights in a way that is indefensible in the 21st century.

Keir Starmer’s TikTok video about capping ground rents has been viewed by about 20,000 people. Much more popular is a video of Starmer impersonating (albeit rather half-heartedly) Emmanuel Macron, in a live interview last night with the political podcaster and comedian Matt Forde. Starmer was handed a pair of sunglasses, which he promptly put on, saying “Bonjour”. The clip has notched up more than 160,000 views. Starmer (or, more probably, his social media team) tagged Macron in the post, with the line “Talk to me, Goose”, a reference to the Top Gun movie which seemed to inspire the look Macron was modelling with the shades he was wearing at Davos.

Keir Starmer being interviewed by Matt Forde last night Photograph: TikTok

Blocking Andy Burnham from Gorton and Denton byelection 'real gift' to Reform UK, Labour MPs tell Starmer

Some Labour MPs have not given up trying to get the part to rethink its decision to ban Andy Burnham from being a candidate in the Gorton and Denton byelection.

As Pippa Crerar, Jessica Elgot and Peter Walker report in our overnight story, the executive of the soft-left Tribune group of MPs – which includes the former ministers Louise Haigh and Justin Madders and the select committee chair Sarah Owen – have told Shabana Mahmood, the chair of Labour’s national executive committee (NEC), that they are unhappy about the decision.

In a related development, around 50 Labour MPs have signed a letter to Keir Starmer saying that blocking Burnham is a “real gift” to Reform UK.

According to a report in the Mail, the letter says:

As a former cabinet member and the current Labour mayor of Greater Manchester, there is no legitimate reason why Andy Burnham should not have the democratic right to put his candidacy to the local people of Gorton and Denton.

This is particularly important as polling clearly shows he may be our very best chance at winning this byelection.

Nigel Farage also thinks that not having Burnham on the ballot is a gift to his party.

Capping ground rents means landlords won't be able to fund essential repairs, and some could go bust, lobby group claims

Investors in the property sector claim that, if ground rents are capped, landlords will no longer be able to fund essential repairs and some firms will go bust. These arguments are set out in a letter published yesterday from Natalie Chambers, director of the Residential Freehold Association, to Steve Reed, the housing secretary.

Here is an extract.

We have previously set out a range of wider concerns with a retrospective cap, including the impact on the UK’s reputation as a reliable place to invest following a government-sanctioned interference with the contracts on which investors rely – and the fact that any ground rent cap would, in the large part, transfer value from pensioners to wealthy overseas buy to let landlords. This letter is intended to address the specific effect of forcing insolvency upon the very organisations which your department is relying on to remediate unsafe buildings.

Ground rent income is a critical and irreplaceable funding mechanism, without which building owners would not be able to meet their statutory duties under the Building Safety Act. Specifically, our members’ ability to provide effective oversight and management of higher-risk buildings, and to enter into government-backed Grant Funding Agreements (GFAs) for remediation works.

Retrospectively removing or reducing the level of contractually payable ground rent, or the contractual reviews to the ground rent, will result in a significant number of professional freeholders being at risk of immediate insolvency. That, in turn, would immediately undermine the contracts and legal obligations that underpin the government’s building safety remediation programme, encompassing approximately 9,000 to 12,000 buildings and with an estimated cost of between £12.6bn and £22.4bn.

In ignoring these arguments, the government has in effect decided that the property sector is bluffing – and that the consequences won’t be as dire as they claim.

Rayner urges government to be more 'unapologetically Labour'

The leasehold announcement is an example of what Angela Rayner, the former deputy PM and former housing secretary, meant when she said at a fundraising event last night that the government should be more “unapologetically Labour”.

In its manifesto, Labour said:

We will take further steps to ban new leasehold flats and ensure commonhold is the default tenure. We will tackle unregulated and unaffordable ground rent charges.

Given the government has a manifesto mandate for what it is proposing today (see 8.57am), the announcement should not come as a surprise. But it has impressed campaigners because the property sector lobbying against the move was so strong that ministers started to have second thoughts. That is why the decision has been repeatedly delayed. When he was housing secretary, Michael Gove wanted to get rid of ground rents altogether, but he also enountered pushback and he failed to overcome Whitehall/government resistance to the idea.

In their London Playbook briefing for Politico, Andrew McDonald and Bethany Dawson report that, at a Labour fundraising event last night, Rayner said the government should be more Labour. She said:

We’ve done a lot of really good things. But my diagnosis of what’s gone wrong is that people think we’ve got there through being pushed there, as opposed to people thinking that that’s what we stand for and believe. I think that we need to be unapologetically Labour.

Green party says government should 'scrap leasehold altogether'

The Green party says the government should be going further on leaseshold, and getting rid of it altogether. This is from Zack Polanski, the Green leader.

Time for Government to stop tinkering around the edges and scrap leasehold altogether.

Starmer ignores property investors’ protests and commits to capping leasehold ground rents at £250

Good morning. At 7am Keir Starmer announced a decision that will benefit millions of leaseholders. Ground rents are being capped at £250, which means that anyone paying more than that will save money. Perhaps more significantly, this will protect leaseholders living in properties where ground rent charges soar over time, making their homes hard to sell. The proposal is in a draft commonhold and leasehold reform bill.

While this may sound like a cost of living policy announcement of no particular interest to people who are not leaseholders, it is actually quite an important revealed preference moment for the Guardian. This announcement has been held up for months and months because of lobbying from the financial sector (channelled through the Treasury), who have argued that capping ground rents will hammer property investors, and even the pension funds that have money tied up in this sector. There have been been threats of legal action over the retrospective element of this legislation (which will apply to existing ground rent agreements, not just new ones). In a Guardian article about this last week, Angela Rayner, the former deputy PM and former housing secretary, said:

If Labour cannot fix such an obvious injustice and show families whose living standards have been crushed that we will fight for them, then we shouldn’t be surprised if they lose faith that anything can change.

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.

Today Starmer has sided with Rayner, leaseholders and the younger generation, against the Treasury and the financial sector. It is a significant moment.

Jamie Grierson has the story here.

Here is the government’s news release. And Starmer announced the decision this morning in a post on TikTok. According to No 10, this is the first time a PM has made a major government new announcement on this platform.

Steve Reed, the housing secretary, said:

If you own a flat you can be forced to pay ground rents that can become completely unaffordable. We said we’d be on the side of leaseholders – which is why today we are capping ground rent – helping millions of leaseholders by saving them money and giving them control over their home.

The leasehold system has tainted the dream of home ownership for so many. We are taking action where others have failed –strengthening home ownership and calling time on leasehold for good.

Under the draft bill, the government is also going to ban leasehold for new flats, and give existing leaseholders the right to switch to commonhold. (This briefing explains the difference.)

But it is only a draft bill. The government says the cap on ground rents is not likely to come into force until late 2028.

Here is the agenda for the day.

9.30am: Keir Starmer chairs cabinet.

11.30am: Rachel Reeves, the chancellor, takes questions in the Commons. She is expected to announce a £100m support package for pubs to compensate (at least in part) for the impact of higher business rate costs.

Noon: Downing Street holds a lobby briefing.

After 12.30am: Matthew Pennycook, the housing minister, is expected to make a statement to MPs about the decision to cap ground rents.

2pm: The Reform UK Lee Anderson holds a press conference in Gorton and Denton where he will unveil the party’s byelection candidate.

2pm: John Healey, the defence secretary, gives evidence to the Commons defence committee.

Evening: Starmer leaves the UK for his trip to China.

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