RFA letter to Secretary of State (January 2026)
Ahead of the imminent publication of the draft Leasehold and Commonhold Reform Bill the RFA has written to the Housing Secretary to warn of the potential consequences for the Government’s £22.4 billion building safety remediation programme.
Dear Secretary of State,
I am writing on behalf of the Residential Freehold Association (RFA), the trade body representing professional freeholders responsible for around one million leasehold properties. Freeholders are a critical component of the Government’s building safety remediation programme, and as such we are dutybound to raise serious concerns about the severe and immediate consequences that a retrospective cap on ground rents – if included in the forthcoming draft Leasehold and Commonhold Reform Bill – would have for building safety and the delivery of remediation projects.
A retrospective cap on contractually payable ground rent would remove the financial foundations of the organisations the Government is relying upon to deliver its priorities – weakening, and in some cases disabling, delivery of building safety remediation and other strategic programmes. At this stage of the remediation programme, continuity and financial stability are fundamental to delivery.
As you know, the RFA supports many of the proposed leasehold reform measures under consideration, including the regulation of managing agents, which will improve transparency and raise professional standards. 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 £12.6 billion and £22.4 billion.
For the avoidance of doubt, insolvency would not be the result of commercial failure – nor would it be a choice – but the direct and foreseeable consequence of government interference with contractual ground rent payments on which existing contractual obligations depend. While our members remain fully committed to the Government’s mission to making buildings safe, the Government needs to be aware that forced insolvency caused by any retrospective cap or restriction to ground rent would strip them of the legal and financial capacity to deliver remediation works.
In specific terms, insolvency would prevent building owners from giving the representations and warranties required to enter into new GFAs. For existing, executed GFAs, insolvency, or other defaults prior to insolvency, would trigger an “Event of Default” and/or a “Material Adverse Effect”, requiring notification and rendering those agreements effectively unworkable. As a result, remediation programmes would stall or collapse, buildings would be left without a viable accountable person, and responsibility for safety-critical works would be removed.
The consequences of a cap would also extend beyond building safety. Flagship Government programmes, including the Warm Homes Plan announced this week, also depend on professional freeholders to act as long-term stewards of complex residential buildings, capable of coordinating funding, contracting delivery and overseeing works at scale. Freeholder insolvency would remove that delivery capacity, leaving key Government ambitions undeliverable on the ground.
We therefore strongly urge you to reconsider the inclusion of any retrospective ground rent cap in the forthcoming draft Leasehold and Commonhold Reform Bill, and to fully assess its real-world implications for building safety and the delivery of wider Government policy.
We have a meeting with you and your team scheduled to discuss building safety on 11 February but given the reports about a retrospective ground rent cap, we are obliged to raise these concerns with you as a matter of urgency.
Yours sincerely,
Natalie Chambers
Director
Residential Freehold Association