LEASEHOLD CHARGES: Latest reforms revealed by Prime Minister

Following months of debate and speculation the Government has published its latest plans to radically overhaul the system of leasehold charges in England.

The measures announced include stronger rights for leaseholders to know what their service charge pays for each year and challenge unfair or explained items and new rules to ensure bills are ‘clearer and upfront’.

Ministers have also listened to campaigners and new protections have been unveiled that will stop landlords saddling their leaseholders with legal bills if they do challenge service charges.

These measures will go live on April 1^st 2027 and, the Government says, will give people a clearer picture of how their building is managed, maintained, repaired and insured.

Leaseholders will be able to ask for information from previous years and landlords will need a good reason to refuse to provide it.

Legal costs

Also, if landlords wish to pass on their legal costs when charges are challenged by leaseholders, they will need court or tribunal approval while leaseholders are to get a new right to claw back their legal expenses.

The Government is going further in stages, too. This includes that from 1^st November 2027 leaseholders being given transparent bills regardless of whether their landlord is private, council or housing association while private landlords will have extra duties to provide new simpler, standardised service charge demand forms and provide financial accounts and annual reports to leaseholders. Other landlords will follow suit a year later.

“It is simply wrong that millions of leaseholders can be hit with unfair charges, then face another bill just for challenging them. That isn’t right, and where we can act quickly to change it, we will,” says Prime Minister Andy Burnham (main image).

“Today’s changes are only the beginning. We’re giving leaseholders stronger rights now, while we press ahead with the bigger reforms needed to put power back in homeowners’ hands and end the feudal leasehold system for good.”

His housing minister Matthew Pennycook, who has steered these changes through a laborious consultation process, says: “Rapidly escalating and frequently opaque service charges are placing huge financial strain on hard-pressed leaseholders across the country.

“Today, we’re acting to protect them by introducing regulations that will improve the fairness and transparency of service charges so that unreasonable increases can be more easily challenged.

“As we work to dismantle the feudal leasehold system in this Parliament, we won’t leave existing leaseholders behind.”

These measures enact key but delayed measures first unveiled within the Leasehold and Freehold Reform Act 2024, with further reforms promised before the Christmas break.

Chief Executive of the Leasehold Advisory Service, Kion Ahadi, says: Service charges are the most common issue leaseholders contact us about. We welcome these changes as an important step forward in helping people understand what they are paying for and challenge costs they believe are unfair.

Read more: Government warned not to repeat mistakes on leasehold reform.