Leasehold reforms promise relief for millions facing rising costs
Millions of leaseholders across England and Wales are on the verge of seeing real change in how they are billed and managed, as long-awaited reforms to the leasehold system begin to take effect this summer.
For years, leaseholders have complained of service charges that arrive with little explanation, often running into thousands of pounds for upkeep of shared areas, insurance, or major works. In some cases, residents have been forced to pay for poor-quality work, or even for work that was never completed. With the cost of living already squeezing household budgets, these charges have become a source of both frustration and financial strain.
Now, the government has activated provisions within the Leasehold and Freehold Reform Act 2024, promising stronger rights and protections for nearly five million leaseholders. The changes, ministers argue, will give people the transparency they need to challenge unfair bills and poor property management.
What’s changing for leaseholders
At the heart of the reforms is a new requirement for standardised service charge documentation. Landlords will no longer be able to present vague, one-line demands for payment. Instead, bills will need to set out clearly how costs are calculated and where the money is being spent.
Leaseholders who want to challenge these costs will also be in a stronger position. Crucially, the reforms aim to end the common practice of leaseholders having to pay a landlord’s legal fees even when they win their case.
The government is also consulting on further measures, including:
- Improving the Section 20 process to prevent residents from receiving huge one-off bills for major works with little notice.
- Greater transparency in building insurance is needed after the Financial Conduct Authority found premiums for flats rose by 125% between 2016 and 2021.
- Mandatory qualifications for managing agents require that property managers have the knowledge and accountability to do their jobs properly.
- Giving leaseholders the right to demand a switch, or veto, of managing agents if they are unhappy with the service.
Why this matters now
Figures from the Leasehold Advisory Service show that one in three of their enquiries last year were about service charges, highlighting how widespread the problem has become. On average, leaseholders paid £1,720 per year in 2023–24 for building and communal upkeep, the equivalent of £33 a week, on top of mortgages, rent, and rising utility bills.
For many, these reforms may not immediately lower costs, but they do provide new tools to scrutinise bills, challenge unreasonable demands, and demand higher standards of management.
Industry reaction
Industry bodies have cautiously welcomed the reforms. The Royal Institution of Chartered Surveyors (RICS) called them “an important step forward in raising standards and improving transparency.” At the same time, the Property Institute stressed that clearer information and mandatory qualifications could give leaseholders more confidence.
Both organisations warned, however, that qualifications alone won’t fix systemic problems in the sector. They urged the government to ensure the reforms are enforced effectively and deliver the promised protections.
The bigger picture
The reforms are part of a wider plan to phase out what ministers call England’s “feudal leasehold system.” The government has committed to making commonhold a model widely used overseas, where residents collectively own and manage their building, the default for new flats. A draft Leasehold and Commonhold Reform Bill is expected later this year.
For leaseholders already struggling with opaque bills and spiralling charges, the reforms taking effect this summer could offer a measure of relief. They don’t end the leasehold system overnight, but they signal a significant shift: one that places more power in the hands of residents, and less in those of landlords and managing agents.
And while the reforms may give individuals better tools to question their bills, many leaseholders are also turning to specialist service charge accountants to audit charges, identify errors, and ensure they only pay for what is fair and transparent. Professional advice is increasingly seen as a vital safeguard not just against excessive costs, but in making the most of the new rights these reforms provide.