Leaseholders to get cheaper bills within months in crackdown on service charges

Résumé détaillé

New laws over the coming years will help protect homeowners from rising service charges and ultimately end leasehold forever ...

Millions of flat owners are set to have their bills cut as the Government moves forward with ending leasehold homeownership in England and Wales, The i Paper has been told.

Housing and Planning Minister Matthew Pennycook said that Labour “will bring the [leasehold] system to an end…in a careful and methodical way”, which “means the change is lasting and permanent”.

Around five million leasehold homes are thought to exist in England and Wales – the majority of them are flats. Property law is devolved in both Scotland and Northern Ireland, meaning any changes to leasehold ownership will only affect England and Wales.

Leasehold homeowners live in buildings controlled by freeholder landlords, with many reporting rising service charges, unaffordable ground rents and high costs when they try to enfranchise (take control of) their building or sell their home.

But from 1 April 2027, leasehold homeowners will receive new powers under the Leasehold and Freehold Reform Act 2024 to demand information about what they are being billed for in their service charge so they understand what they are paying and why.

Once the new regulations come into force next year, landlords will need court or tribunal approval to pass on any legal costs to leaseholders who have challenged their service charge.

Leaseholders will also get the new right to claw back their own legal expenses for the first time and will have new protections to stop freeholders passing their legal bills on as well.

Pennycook said Labour’s overall “jigsaw” package of leasehold reform, which includes Labour’s forthcoming landmark Commonhold and Leasehold Reform Bill, was “the most ambitious overhaul of land and property law in a generation”.

“Leaseholders are subject to a range of unfair and unreasonable practices, but chief among their complaints is rapidly escalating, frequently opaque service charges,” Pennycook told The i Paper. “They are putting huge financial strain on leasehold homeowners across the country.”

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