Written evidence submitted by Landmark Group [CLR 171]

About Landmark Group

Landmark Group is a UK-based, UK tax-paying professional freeholder established 26 years ago and still under its original founder ownership.

We currently own and manage over 36,000 residential properties.

Our platform includes:

• FCA-authorised insurance operations overseeing approximately £7bn of insured assets
• Active EV infrastructure installation and operation across apartment schemes
• In-house legal and asset management specialists in building safety and risk
• Ground rent management for our own assets and third-party institutional investors
• FCA-authorised AIFM fund management

We have supported proportionate regulation and reform for over a decade and were among the first professional freeholders to engage with Government on leasehold reform in 2016. We remain in ongoing dialogue with MHCLG, HM Treasury and major mortgage lenders.

Executive Summary

Landmark supports reform that improves consumer protection, transparency and professional standards. However, in its current form, the draft Bill creates material systemic risk across:

• Building safety delivery
• Insurance availability and pricing
• Mortgage lending confidence
• Professional governance capacity
• Housing supply

Key concerns:

1. Funding Imbalance – The Bill caps or removes ground rent income while expanding statutory and compliance obligations. This risks destabilising professionally managed building governance structures.
2. Building Safety Conflict – The Bill does not sufficiently align with the Building Safety Act 2022. Converting buildings with live remediation programmes into commonhold risks contractual disruption and funding uncertainty.
3. Enforcement Risk – Removal of forfeiture without a clearly defined, effective replacement mechanism weakens compliance incentives relied upon by insurers and lenders.
4. Regressive Economic Effects – A flat £250 cap transfers capital value irrespective of affordability or need and lacks a defined affordability evidence base.
5. Market Fragmentation – Removing professional freeholder structures without a tested governance alternative risks higher insurance pricing, increased lender caution and reduced housing delivery.

We recommend:

• Targeted rebasing of genuinely onerous rent review clauses rather than a universal cap
• Clear statutory replacement mechanisms if forfeiture is removed
• Transitional safeguards aligning tenure reform with building safety legislation
• Implementation of Regulation of Property Agents (RoPA) reforms
• Structured transition preserving professional oversight capacity

1. How effectively does the draft Bill meet the Government’s own policy intentions, including its commitment to “bring the feudal leasehold system to an end”?

Modern residential leasehold is a contractual, statutory and court-regulated tenure. Framing it as “feudal” risks oversimplifying a complex legal and financial system.

The Government’s stated objectives include:

• Promoting commonhold
• Improving consumer experience
• Increasing security and control
• Tackling abuse

Does the Bill achieve these policy intentions?

In its current form, the Bill risks undermining governance capacity without providing a fully operational replacement framework.

Professional freeholders currently:

• Oversee building safety compliance
• Enter and manage remediation contracts
• Maintain insurance arrangements
• Fund irrecoverable compliance gaps
• Enforce covenants to protect residents

Removing funding streams while increasing statutory obligations creates operational strain and may reduce professional participation in the sector.

Missed policy intentions

The Bill does not fully address the combined interaction between:

• The Leasehold and Freehold Reform Act 2024
• The Building Safety Act 2022
• Proposed tenure changes

Restrictions on service charge recovery for certain safety works combined with removal of income streams create a funding gap not currently addressed in the draft.

What is the effect of the Bill on the stated policy intentions?

Potential systemic consequences include:

• Market fragmentation and loss of professional economies of scale
• Upward repricing of insurance and credit risk
• Increased difficulty resolving complex compliance issues
• Reduced appetite among developers to retain or manage freehold interests

Reform should consider second-order effects across insurance, lending and development finance markets.

2. Will the Government’s proposal for a cap on ground rents of £250 a year, changing to a peppercorn after 40 years, tackle unregulated and unaffordable existing ground rent charges?

Ground rents are contractually defined and subject to legal and mortgage oversight at point of purchase.

The Government has not provided a measurable definition of “unregulated” or “unaffordable”.

The English Housing Survey reports an average ground rent of £304 per annum. UK Finance guidance indicates most lenders accept ground rent up to 0.5% of property value.

A flat £250 cap:

• Does not account for regional value variation
• Transfers capital value irrespective of means
• Removes long-term income streams relied upon by institutional investors

Portfolio data indicates ownership diversity, including owner-occupiers and investment holders. A universal cap produces distributional effects that are not means-tested. For example, One Hyde Park whose leaseholders are ultra wealthy offshore entities pay ground rents of up to £10,000 a year to a US pension fund owned landlord. Post reform, the ground rent will reduce by 97% and transfer hundreds of millions of future rent payments away from pensioners to the already extremely wealthy residents of One Hyde Park.

Why is there no policy definition of unregulated and unaffordable ground rent?

Affordability varies materially across regions and price brackets.

Applying a fixed national cap without income or value context risks imbalance and unintended redistribution.

What is the lending market’s view on unaffordable ground rent?

Major UK lenders continue to lend on properties with ground rent levels above £250 where terms are proportionate to value.

Market evidence does not indicate widespread mortgage friction in relation to non-onerous ground rent levels.

What is an acceptable alternative to achieving policy intention?

A proportionate alternative would be:

• Statutory rebasing of genuinely onerous review clauses to original rent
• Mandatory index-linking thereafter
• Value-sensitive thresholds rather than flat caps

This targets outliers while preserving system stability.

3. How does the draft Bill seek to address the respective property rights of leaseholders and freeholders?

The Bill rebalances interests by:

• Capping or removing ground rent
• Replacing forfeiture
• Facilitating collective enfranchisement

Has this policy aim been achieved?

The current approach risks reducing funding available for governance and compliance without establishing a robust alternative framework.

Professional freeholders often fund irrecoverable compliance and safety-related costs. Removing income without replacement mechanisms may reduce oversight capacity and increase instability.

What is the impact of the compliance and governance issues identified?

If governance funding is reduced:

• Insurance arrangements may become more complex or costly
• Remediation programmes could face disruption
• Lenders may reassess risk exposure

System-wide modelling of these impacts would assist policy calibration.

4. Will the draft Bill’s proposal to end the use of forfeiture against leaseholders go far enough to redress the imbalance between leaseholders and landlords when there is a breach of covenant?

Forfeiture is rarely exercised but has deterrent value in multi-occupancy buildings.

Its presence supports:

• Timely dispute resolution
• Service charge compliance
• Containment of serious nuisance and safety breaches

If forfeiture is removed, Government should define:

• A clear replacement enforcement mechanism
• Maximum resolution timelines
• Cost recovery rules
• Engagement with insurers and lenders

An alternative approach could include statutory “no windfall” provisions while retaining enforceability.

5. Should provisions implementing the remaining recommendations of the Regulation of Property Agents: Working Group be included in the final version of this Bill?

Yes.

Many concerns raised by leaseholders relate to:

• Managing agent standards
• Service charge transparency
• Remediation management

These are tenure-agnostic issues. Implementing RoPA recommendations would materially improve consumer outcomes.

6. What would be the consequences of converting to commonhold for leaseholders in blocks with building safety defects?

Buildings subject to the Building Safety Act 2022 often have:

• Live remediation contracts
• Grant Funding Agreements
• Ongoing litigation or settlement processes

Converting such buildings mid-programme risks:

• Contractual renegotiation
• Contractor repricing
• Funding uncertainty
• Delivery delays

Resident-led governance structures may face significant regulatory and financial complexity.

Transitional safeguards are essential where buildings have active remediation obligations.

7. What are the possible impacts of the draft Bill on the property sector, including to property values and housing supply?

Leasehold is a long-established and financeable tenure.

Commonhold has historically seen limited uptake. The Bill does not yet address:

• Development finance appetite
• Mortgage lender system adaptation
• Professional training and valuation frameworks

Without market confidence and transitional clarity, supply may slow during the adjustment period.

8. Do the provisions in the draft Bill improve confidence in commonhold across the property sector?

At present, market participants seek greater clarity regarding:

• Governance funding models
• Enforcement mechanisms
• Interaction with building safety legislation
• Lender treatment

Confidence will depend on operational detail and transitional stability.

February 2026