Exactly a year after the general election, the Labour government has announced another tranche of secondary legislation to the 2024 Leasehold and Freehold Reform Act. Or, rather, consultation on the secondary legislation.
This time the measures address standardised service charges – to make them immediately comparable and transparent – and they will include insurance costs and, unexpectedly, the failed section 20 major works process.
It is understandable that leaseholders vent their frustration at the apparent lack of urgency behind these measures, given the near silence over leasehold reform – and the ongoing building safety quagmire – by senior ministers.
It is disappointing that the brilliant leaseholders behind End Our Cladding Scandal appear to believe that they had more empathetic dialogue with the last government than with the present one.
Somehow or other, when it comes to housing we are being asked to believe that supply is the overwhelming, all encompassing issue and that we are going to build a huge number of some sort of new homes – with targets no one in the sector believes will be achieved – while the interminable corporate fiddling in housing is not addressed with some urgency and determination.
Just to re-cap, that would include a whack-a-mole list involving leasehold gaming; “fleecehold” private estate companies; Homes England duped into issuing grants to failed property business models; internationally risible build standards and the future expensive train crash involving shared ownership (which consumers are not allowed to know about because shared ownership re-sale data is not made public).
Who benefits from that, do you suppose?
One could add to the list retirement housing, although it was excellent to see MPs of the housing select committee robustly confronting McCarthy Stone’s record earlier in the week.
So hats off to MPs Florence Eshalomi, the committee chair, Joseph Powell, a co-chair of the APPG on leasehold reform whose pointed questioning comes in at 11.13, Lee Dillion and Will Forster.
Most fair-minded and informed leaseholders appreciate that these reforms need to be got right: that freeholders and the professionals they employ will undermine them if they possibly can. The power in leasehold has all been one way for years.
They know that a well-funded effort by freehold owning groups to derail the 2024 Act is underway in the courts with a judicial review starting on July 14. The freeholders are arguing that the loss of enfranchisement incomes (marriage value) is an infringement of their human rights.
Until this is resolved enfranchisement reform – and conversion to commonhold – is heading nowhere.
Obviously government needs to steer clear of matters being dealt with by the courts, but frankly its own reform efforts could be accompanied with a little bit of enthusiasm and drive.
But being positive, it is worth recalling that this consultation is not about whether to reform service charges but instead how best to do so.
In addition, and in fairness to housing minister Matthew Pennycook – who is one of the few politicians who has troubled himself to understand this stuff – he has kept to the schedule of leasehold reform that he announced last November.
His ministerial statement today does make disobliging reading to freehold owning vested interests, with references to “opaque and substantial building insurance commissions”; and:
“Improving the fairness and transparency of service charges and rebalancing the legal costs regime will significantly strengthen leaseholder consumer rights, but we are using the consultation to seek views on proposals that extend beyond those reforms to the leasehold system already in statute as a result of the Leasehold and Freehold Reform Act 2024.
“Specifically, we are inviting views on reform of the Section 20 process that leaseholders must go through when a landlord wants to carry out ‘major works’ funded by a service charge. We know that one-off, unexpected, and often very large bills for major works can place huge financial strain on leaseholders. Far too many receive little or no notice about such works and so have little time to obtain sufficient funds.”
There is even reference to regulation of managing agents and the need for proper qualifications.
Here we would say: leave the market as open as possible to new entrants: they are often more wholesome than some of the incumbents. And don’t let them regulate themselves to any degree.
The Association of Residential Managing Agents’ self-regulation regime went phut – and ex-New Labour minister Sally Keeble resigned as regulator – when a disgruntled managing agent sued over the disciplinary process.
The successor outfit, The Property Institute, suspended FirstPort for three months in December last year, but omitted to tell anyone until prompted. And FirstPort omitted to tell MPs, when it met a group of them earlier this year.
Meanwhile, RICS farcically had to reinstate 317 struck-off chartered surveyors after a clever barrister made a mockery of its disciplinary process:
The full consultation published today of 134 pages can be read here:
It needs to be completed by 26 September.
Leaseholders should participate – you know full well the other side will – and LKP will produce a guide to make key points in a reasonable amount of time.
Matthew Pennycook’s ministerial statement can be read here:
https://questions-statements.parliament.uk/written-statements/detail/2025-07-04/hcws780
Executive summary of the consultation is here:
The consultation:
The MHCLG press office summary:
Related posts:
Government announces regulator to protect leaseholders and their £4 billion in service charges
Has Coronavirus caused collapse in service charge receipts? Not yet, says ARMA, but we will see in September …
MPs told of the murky world of leasehold service charge accounts … by an accountant
Dismal picture of leasehold emerges from MPs’ debate. But no government commitment on reforms
‘The time is right for commonhold,’ announces Law Commission. (Pity the government doesn’t agree …)
National Leasehold Campaign founders honoured for their work
I think it is correct to say that it appears the overwhelming and encompassing issue is to get more Affordable Housing to the detriment of sorting out the existing Leasehold system.
Our Social Housing Landlord MTVH certainly appears to adopt that policy in that more and more Affordable Housing is the aim, maybe because the Government helps fund it.
I am sure this will apply throughout all the Social Housing Sector
Unfortunately it means that existing Leaseholders will continue to suffer high Service Charges, poor Repairs and Maintenance, and unresponsive Management.
None of the bastards will do anything. I’ve given up. If I can’t flog my flat at auction I will just walk away.
At least the. someone else can be a slave to my thieving freeholder/MA (the same despite their lies pretending they’re not).
What? Why would you do that?
Name and shame your freeholder but don’t let him grind you down. Matthew Pennycook may not be the great mind he says he is and shining light some others expected but this British ‘we’re so upright and honest compared to other countries’ corner of the national fabric is beginning to fray.
Sure, it may take a while longer and you have to pick your battles but freeloaders will have to give up many of their privileges in the end. It’s just a shame they choose to do so the hard way and throw so much money into the accounts of the legal profession instead of spending their cash on something more interesting. and fun.
First port, our landlord, shows insurance cost in the annual account but refuses to show a broad breakdown in the huge management charge, saying it is not required by law to do so. All we want is a broad breakdown, such as legal fees, health and safety, head office overheads, salaries, and profit. No detail required.
Yes we have the same problem with Hyde Housing. They supply an invoice pack if requested but for most of the items it is not detailed enough to challenge. The complaints procedure takes forever. We have an issue this year of where they have massively overestimated our service charge by an increase of £150 per month. They refuse to say how their estimates are calculated. You have no choice but to pay. Residents are struggling to pay, they cannot sell and all for an ‘estimated’ charge. What good is their transparency flagship in this scenario?
Any ideas what the Section 20 reforms will look like? As an RTM Director, our experience is that it’s very bureaucratic and the legal language often confuses. We end up often having to send separate information to actually explain what is happening. I would hope we could end up with something a bit less legal and more focused on active consultation / engagement.
We’ve also had to do urgent repairs and the timescales become a problem. We tried the legal dispensation process but that took ages and incurred us additional costs.
One key improvement would be to legislate that the management of developments should be put out to tender every 5 years. We operate in the retirement sector and most of our flats are managed by First Port. They have been managing these blocks in almost all cases for 30 to 40 years and they have never been subject to competition! Can you think of any other business (other than a statutory monopoly like a water company) whose services have never been price checked? Compulsory tendering would result in competition, bring prices down and improve service quality!
One solution is Right To Manage but under present legislation that requires a 51% majority in favour from all flats, not just those voting so if you do not vote (and many elderly will not vote) then you are voting for the status quo. Result is RTM is difficult to achieve.
I believe that compulsory retendering would work wonders for this sector of the housing market. Competition is vital to ensure that the customer receives value for money and a quality service delivered on time and at the right price.
Section 20 reforms will be a wast of time with the likes of Churchill Living / Churchill Estates Management unless enforced.
The mockery they make of existing Section 20 legislation it is used just as an excuse to add yet further thousands of pounds to leaseholders service charges without even complying with S20 tendering procedures.
There is an urgent need for regulation of Managing Agents and a functioning Code of Practice, most especially for retirement housing.
I instigated a RTM withdrawing from Accent, who in my opinion are an unfit company to mange anything. Since we became an RTM and found our own management we have prospered. Our funds were virtually negative but we now have heathy funds thanks to very good management
And our maintenance charges have never increased since they took over in 2020. However they do not deal with the lease charges as Accent did so now Domas has. Now to
Notify and collect them himself. He has Imposed a management charge of £1. Not a lot but even Accent never made any such charge. I live I. Sheltered accommodation and our ground rent is not particularly high and does vary from flat to flat. It is supposed to be based on RPI at the time of sale and how many times the flat has been sold. As you will appreciate tenancy is usually changed quite frequently but I ask a new tenant what her ground rent was and was amazed at the amount he is charging her. It is in excess of mine by a considerable amount and the previous tenant had been occupant longer than me and I have been a resident for since 2011. When the RPI was high but I. Checked to see if the increase was correct. Which as far as I could work out it was. Now the landlord is dealing with charges himself I feel he is not acting according to the lease. It is impossible to contact him as I have been trying to do over a decretion which Accent created when we changed management. He has asked for my telephone number and my email but I wrote telling him I do not conduct business by telephone or internet. I things in writing so that I can study them in my own way. I have written to him twice and never had a reply or ackowledgement. I would like to know what he does for his money which from observation is nothing.
The remedies in s21/22 of the Landlord and Tenant Act 1985 ,when landlords deliberately refuse to comply with their statutory duties are completely inadequate.
Landlords know this and consequently ignore their respon̈sibities – i.e to show leaseholders accounting details used to support service charges
Thank you for keeping us informed.
1) section 20, even all procedures for consultation are carried out, this is just to tick boxes. The major works will happen regardless and according to the freeholder ‘fleecing’ plan.
Have you ever wondered why leaseholders have to pay for renewal/major refurbishment of communal parts that belong to freeholder solely? Freeholder is not obliged to contribute to renewal of inside of leasehold flats, so why leaseholders have to contribute to renewal/refurbishment of property belonging to the freeholder? Why the burden lays on leaseholders when they do not own the common parts? How unfair is that?
2) 134 pages of consultation, it will be helpful if LKP publishes shorter version in bullet points on all changes are proposed so leaseholders can review and send their feedback. Who is going to read 134 pages? It is unrealistic for busy people.
I recognise the importance of Government consultation, especially involving Leaseholders, third parties, and all relevant stakeholders. I recommend allowing all participants to upload supporting written and photographic evidence for this consultation, as visual documentation can be particularly compelling. During a recent section 20 consultation at this site, I gathered documentary evidence that suggests unnecessary works were undertaken by an unqualified managing agent,resulting in unsatisfactory outcomes allegedly. I would like the opportunity to share these materials throught the consultation process.
Regulating managing agents is vital in my opinion. While many firms provide high – quality, timely, and cost – effective services – often surpassing customer satisfaction benchmarks – others are consistently reported for poor performance.
THE RTM process should consider only those who actually vote, with a 51% majority sufficient – similar to how Members of Parliament are elected, a system proven over time and globally accepted.