Freeholders may “resort to lawfare” to block the government’s £250 cap on ground rents, Angela Rayner has warned, as leasehold experts urged ministers to speed up the “glacial” pace of reform.

Keir Starmer announced a cap on ground rents for leaseholders in England and Wales as part of measures that also include a consultation on banning new leasehold flats and giving leaseholders the right to switch to commonhold.

The ground rent cap will drop to a “peppercorn” rate after 40 years, a move that leasehold campaign groups have long pushed for.

Rayner, who was a vocal proponent of the cap, urged the government to stand firm against landlords who opposed the changes and who previously launched a high court bid to try to stop some leasehold changes.

“We know that vested interests have repeatedly resorted to lawfare to block such measures and may do so again,” she told the House of Commons. “And we’ve already seen the scaremongering begin with outrageous claims that this will impact on life-saving building safety work.”

The housing minister, Matthew Pennycook, said: “Taking on vested interests opposed to change to bring about improvements in the lives of working people is what Labour governments do.”

The National Leasehold Campaign (NLC), a grassroots leaseholder group in England and Wales, said it was disappointed by the government’s decision not to immediately enforce peppercorn ground rents, although it acknowledged the cap would offer some relief.

“The cap will make a difference, particularly for people who bought new-build properties in the last 20 years with punitive ground rents,” said Jo Darbyshire, a co-founder of the NLC. “Ground rent is a charge for no service, it’s money for nothing. However, 40 years is an incredibly long time to wait for peppercorn ground rents.”

Linz Darlington, a managing director at the lease extension specialists Homehold, said that while the announcement was positive, it was “a long way from becoming law”.

“We are still waiting for much of the Leasehold and Freehold Reform Act 2024 to be implemented, 18 months after it gained royal assent,” he said. “For the cap to be of any benefit to leaseholders, we need this passed promptly and on to the statute books. At the current pace of reform, it may not be for many years to come.

“The speed of leasehold reform is glacial. We need meaningful reform and prompt implementation.”

The ground rent cap is part of the new draft leasehold and commonhold reform bill, which will also abolish forfeiture – when leaseholders can lose their home and the equity they built up by defaulting on a debt as low as £350.

It also will mean those living in a building with a commonhold model will have a say in the annual budget and how the building is run, and new protections when things go wrong.

The housing secretary, Steve Reed, 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.”

The Residential Freehold Association, the trade body representing professional freeholders, has argued that a “forced exit of professional freeholders from the sector” would pass their responsibilities under the Building Safety Act to leaseholders and hinder building safety projects.

It also said the cap on ground rent was “a wholly unjustified interference with existing property rights” and would “seriously damage investor confidence in the UK housing market”.

Others have also issued warnings about the potential risks of the commonhold system. Justin Herbert, a managing director at Residential Management Group, one of the largest property management companies in the country, said residents should have more control over how their buildings were run but he advocated a blended model.

“While commonhold may be well intentioned, full control comes with full responsibility,” he said. “We have seen the consequences of that first-hand, including a scheme where fire safety failures led to a building being closed for years and residents left homeless.

“A blended model puts residents in charge of every key decision, while experienced managing agents retain responsibility for building safety and regulatory compliance.”