Over 3 million flat owners handed massive boost to fight rip-off service charges
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Millions of leaseholders to get stronger rights to know exactly
what they are paying for and challenge unfair or unexplained
service charges New protections will stop leaseholders being
saddled with landlords' legal bills for challenging costs Further
changes will make information on charges standardised, clearer and
upfront Over three million leaseholders will have more control of
their cash and stronger rights to tackle unfair service charges, as
the...Request free trial
Over three million leaseholders will have more control of their cash and stronger rights to tackle unfair service charges, as the government delivers another everyday fix to stop homeowners being left out of pocket by unfair costs. From 1 April 2027, leaseholders will gain strong powers to demand information about their service charges, making it easier to see what they are paying for and why. This 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. From the same date, leaseholders will also get stronger protection from having to pay their landlord's legal costs when they challenge a charge. This will end a huge barrier to fighting costs, by stopping landlords from charging leaseholders whether they win or lose, as a power to put them off. Landlords will need court or tribunal approval to pass on any legal costs to leaseholders and to balance the scales of justice, leaseholders will get the new right to claw back their own legal expenses too. Together, these changes will make it easier for leaseholders to understand and challenge unfair costs - another everyday fix tackling a real cost of living concern for homeowners, families and aspiring first-time buyers. Prime Minister Andy Burnham said: 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. 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. Housing Minister Matthew Pennycook MP said: 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. Even stronger rules from 1 November 2027 From 1 November 2027, leaseholders will automatically get clearer information about the charges they are being asked to pay whether their building is owned by a private landlord, council or housing association. This includes detailed information about the building insurance they help pay for, along with stronger protections against excessive or unreasonable fees for arranging and managing that insurance. Leaseholders will also receive clearly set out information on admin fees they could face. Private landlords will have extra requirements. They will have to use simpler, standardised service charge demand forms and provide financial accounts and annual reports - giving leaseholders clearer information about what they are being charged and how their money is being spent. Clearer service charge reporting extended to social housing from 1 November 2028 From 1 November 2028, councils and housing associations will also have to provide their leaseholders with the new standardised service charge demand forms, financial accounts and annual reports. Plans form part of a wider leasehold shake-up These changes bring in key protections from the Leasehold and Freehold Reform Act 2024, giving leaseholders more information and greater power over the costs they are asked to pay. Further reforms are also planned through the Commonhold and Leasehold Reform Bill, which is due to be introduced in Parliament before Christmas 2026. Chief Executive of the Leasehold Advisory Service, Kion Ahadi said: "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. Leaseholders need clear information about how their money is being spent and a fair opportunity to raise concerns. Better access to that information and stronger protection from landlords' legal bills will give them more confidence to hold their landlord to account." ENDS Notes to editors
Explainer: Major victory for 3 million leaseholders as government takes action on rip-off service charges If you're a leasehold homeowner, your rights and protections are about to get significantly stronger. The government is on a mission to give millions of leaseholders greater control over their homes and the charges they pay for them. Around 3 million leaseholders pay service charges in England, yet many do not know what sits behind them. Paying to maintain, insure and repair your home is a normal part of homeownership. But for many flat owners, these decisions are made by someone else on their behalf. That means costs can rise with little information about why or where the money is going. And challenging them can carry the real risk of footing your landlord's legal bill - even if you win. That is about to change. From 1 April 2027, leaseholders will be able to: See where their money goes: New legal rights will allow leaseholders to request more information about their service charges, including information going back further in time. Landlords will need stronger grounds to refuse to provide it. Challenge unfair costs more easily: You are no longer at risk of automatically footing your landlord's legal bills for challenging something you think is unfair. The system will also be made fairer by giving leaseholders a new route to apply to recover their own legal costs in appropriate cases. From 1 November 2027: Less chasing and more information provided as standard. Leaseholders will automatically get clearer information about:
Private landlords will also have to provide simpler, standardised service charge demands, financial accounts and annual reports. Council and housing association leaseholders will benefit from the 1 November 2027 insurance and administration charge changes too. The simpler, standardised service charge demands, service charge accounts and annual reports will then extend to them from 1 November 2028. Could this help bring down my service charges? It could help leaseholders push back on costs that are unreasonable, which is a major shift in power. The new rights will give flat owners more of the evidence behind what they are being asked to pay, putting them in a stronger position to question costs that look wrong and challenge those they believe are unreasonable. Landlords will also have to operate in a much more transparent and accountable way. Clearer information, accounts and service charge demands will make it harder for poorly explained costs to go unchallenged, while fairer rules on legal costs will make it less risky for leaseholders to take action where they believe charges are unreasonable. That means greater pressure on landlords to justify how leaseholders' money is being spent and to manage those costs properly from the outset. The reforms do not cap service charges because buildings still need to be maintained, repaired and insured. But where costs are unreasonable, leaseholders will have more information, stronger protections and a fairer route to challenge them. Wait, what actually is a service charge? If you own a flat, you'll usually pay towards the costs of looking after the building and the spaces you share with your neighbours, such as:
The difference from owning a house, which is usually freehold, is that someone else often manages these things on your behalf - so you're paying towards costs you don't necessarily control yourself. That's why homeowners should be able to see what they're paying for and why and have a fair opportunity to challenge costs they believe are unreasonable. And there's more reform to come These new protections are part of a much wider shake-up of leasehold. The Prime Minister has pledged to introduce the Commonhold and Leasehold Reform Bill in Parliament before Christmas, bringing further reforms to give existing and future flat owners greater rights, protections and control. The Bill will include the already announced plans to:
Commonhold means owning the freehold of your flat and having a greater say with other owners over how your building is run. |