Committee publication · Correspondence · 22 April 2026
Letter from the Residential Freehold Association to the Chair dated 31 March 2026 following up oral evidence given on 3 March
From: Housing, Communities and Local Government Committee
Inquiry: Pre-legislative scrutiny of the draft Commonhold and Leasehold Reform Bill
Summary
The Residential Freehold Association (RFA) submitted follow-up evidence to the Housing, Communities and Local Government Committee on 31 March 2026 regarding its oral testimony on the Draft Commonhold and Leasehold Reform Bill. The letter sets out statutory obligations on freeholders—particularly building safety responsibilities under the Building Safety Act 2022—and argues that a ground rent cap risks freeholder insolvency, disrupting remediation activity and leaving leaseholders exposed to unmet safety obligations. The RFA challenges the Government's Impact Assessment, citing insufficient analysis of insolvency risk and wider economic harm.
Key findings
- Freeholders bear significant statutory building safety obligations under the Building Safety Act 2022 as 'Accountable Persons' and risk criminal liability for non-compliance; a ground rent cap threatens their financial capacity to meet these duties, particularly in remediation programmes covering 9,000–12,000 buildings with estimated costs of £12.6–£22.4 billion.
- The RFA's economic analysis shows the ground rent cap will eliminate 55–61% of freehold asset value (£10–£12.7 billion loss recognised by Government's own Impact Assessment), equivalent to 0.6% of GDP, potentially reducing housing starts by 20,000 per year and cutting business investment by £9 billion annually.
- Ground rent is not a service fee but a contractually agreed rent that funds long-term institutional stewardship, building safety compliance infrastructure, and upfront capital for major works; it comprises less than 1% of annual property costs.
- The RFA has engaged consistently with Government since September 2022 via consultations, Select Committee hearings, and roundtables; the claim it waited until one week before Bill publication to raise concerns misrepresents a four-year track record of engagement.
- The Government's Impact Assessment treats freeholder losses as neutral transfers rather than real economic costs, fails to adequately monetise or detail freeholder insolvency risk and its consequences for building safety and resident management, and relies on limited data and untested assumptions about market adaptation.
Tone
AdversarialTopics
Key actors
Residential Freehold Association (RFA), Charmaine McQueen-Prince, Wallace Partnership Group Ltd, Housing, Communities and Local Government Committee, Matthew Pennycook, Nationwide Building Society, Pensions and Life Savings Association (PLSA)
Notable line
“The risk of freeholder insolvency is real, and the potential impacts could be devastating for leaseholders.”
Key Quotes
“The risk of freeholder insolvency is real, and the potential impacts could be devastating for leaseholders.”
“Wallace collects £21,400 per year from ground rent at Skyline Chambers, and as of February this year we had spent over £5 million.”
“If we see mass freeholder insolvencies and the consequences that will entail from that, it would not be a benefit to leaseholders.”
“Ground rent is essential for the continued existence of an institutionally backed professional freeholder who assumes a set of responsibilities including legal accountability for building safety, strategic, long ‑ term stewardship, and financial flexibility and cash ‑ flow support.”
“It is important to firstly acknowledge that there is no area of public policy where retrospective interference into longstanding legal contracts or property rights has been undertaken at such scale, particularly without compensation or replacement value provided in some meaningful form.”
“… we have had policies around ground rents for the last decade, which has allowed us to be able to lend on the majority of leasehold properties. We have not seen ground rents be a significant barrier for us facilitating mortgage lending.”
Source · parliament.uk record ↗