Government consultation on Leasehold Reform – Closes 26th September – please have your say – the freeholders certainly will!
The UK Government’s July 2025 Leasehold Reform Consultation claims to outline major changes to empower leaseholders and end outdated, unfair leasehold practices in England and Wales. Built on the foundation of the Leasehold and Freehold Reform Act 2024 (LAFRA), these proposals focus on increasing transparency, regulating managing agents, reforming legal cost rules, and enhancing leaseholders’ ability to understand and challenge fees and services.
Many people have been critical of the pace of leasehold reform since the current government was elected over a year ago and some of the changes are being challenged by freeholders, who are keen to preserve the current regime which gives them lucrative ground rents and nearly all the power in the relationship with leaseholders. including the choice of managing agents and service charge expenditure. Freehold owners and lobbyists are fighting LAFRA and a judicial review commences on July 14. The freeholders arguing that the loss of enfranchisement incomes (marriage value) in the purchase of freeholds or lease extensions (as is proposed in LAFRA) is an infringement of their human rights. Some major developers/freeholders recently agreed to pay £100 million in fines rather than face further investigation by the competition and markets authority for alleged uncompetitive behaviour, amongst these was Berkeley Homes, the leading freeholder at Chelsea Bridge Wharf,
The government consultation is on a number of leasehold reform issues (see below) is fairly complex however and requires some understanding of the main proposed changes (see below). NLC are offering a webinar on 14th July 6-8pm to help you understand the proposed changes and how you can respond: register here:
The proposals being consulted on are described below:
Section 1 sets out the problem: too many leaseholders are burdened by unclear service charges, excessive admin and legal fees, and poor building management. The consultation introduces key reforms to correct these issues.
Section 2 outlines new transparency measures. Landlords will be required to issue an annual report, standardised service charge demands, and future demand notices. Leaseholders will gain extended rights to request information and receive clearer breakdowns of insurance and admin costs. Year-end service charge accounts will be standardised and delivered within strict timelines. Importantly, leaseholders will also gain greater ability to challenge fees, and landlords will lose the automatic right to pass on legal costs without tribunal approval.
Section 3 proposes further reforms including mandatory reserve funds for major works, updated consultation rules under Section 20, better safeguards for leaseholders’ money, and strengthened protections for those paying fixed service charges. Leaseholders will also have greater powers to remove or replace underperforming managing agents, and digital communications will be encouraged to modernise processes.
Section 4 addresses the regulation of managing agents. The government proposes introducing mandatory minimum qualifications (typically Level 4) for managing agents and property managers. A statutory framework will ensure professional standards, continuing development, and enforcement through professional bodies and local authorities.
Responding to the Consultation
The consultation runs for 12 weeks: from 4 July to 26 September 2025. It invites feedback from leaseholders, landlords, managing agents, and the public to finalise the detailed secondary legislation and guide future reforms, including the upcoming Leasehold and Commonhold Reform Bill.
How to respond
You may respond to the consultation by completing an online survey on Citizen Space. I recommend attending the NLC seminar before completing the consultation survey or at least spend a little time reading and thinking about the proposed changes before replying
Alternatively, you can email your response to the questions in this consultation to protectingleaseholders@communities.gov.uk but it is likely that these responses will not be included in the main report and will form some ort of annexe so they are less useful. However you take part – do have your say, because you can be sure the freeholders and agents will be having theirs! and feel free to post any questions or comments below this post.
Detailed description of the proposed reforms:
1.0 Introduction
The government aims to end the “feudal” leasehold system and empower leaseholders with greater rights, control, and transparency. While the upcoming Leasehold and Commonhold Reform Bill will make commonhold the default tenure, urgent reforms are needed to help current leaseholders—particularly around excessive service charges and legal costs.
2.0 Driving Up Transparency of Fees and Charges
2.1 New Annual Report
Landlords must provide an annual report with key information about the building, contact details, major works, health and safety updates, complaint procedures, and leaseholder rights. Exemptions may apply for certain landlords or retirement schemes.
2.2 Standardised Service Charge Demand Form
All leaseholders will receive a standardised demand that clearly outlines service charge amounts, payment instructions, and a breakdown of planned expenditures.
2.3 Clarity Over Future Service Charge Demands
A new “Future Demand Notice” will inform leaseholders in advance about upcoming costs and their timing, resolving confusion around when charges are incurred.
2.4 Extended Rights to Obtain Information on Request
Leaseholders can request detailed documents, such as receipts or assessments, beyond the summary provided. A statutory list will define what must be shared.
2.5 Scope for Renters
Some reforms will also apply to social housing tenants who pay service charges, ensuring a consistent level of transparency and rights.
2.6 Duty to Publish Administration Charge Schedule
Landlords must publish a clear, consistent schedule of one-off admin charges, including how they are calculated and when they apply.
2.7 Better Information About Insurance
Landlords must proactively disclose details of buildings insurance, including costs, commissions, and conflicts of interest, building on recent FCA changes.
2.8 Standardised Service Charge Accounts
Service charge accounts will be required annually within six months of the financial year-end. They must be accurate, verified by an accountant, and follow a statutory format.
2.9 Rebalancing the Litigation Costs Regime
Landlords must apply to recover legal costs from leaseholders. Leaseholders will gain the right to recover their own legal costs in some disputes. Flexibility will apply to resident-led buildings and certain court cases.
3.0 New Additional Service Charge Reforms
3.1 Mandating Reserve Funds and Planning for Major Works
To avoid sudden large bills, landlords must maintain reserve funds backed by professional long-term maintenance plans. This will ensure better financial planning for major repairs.
3.2 Reforming Major Works Consultations (Section 20)
The current consultation threshold and process are outdated. The government seeks to raise thresholds, clarify notices, improve leaseholder engagement, and streamline smaller works and dynamic contracts (e.g. energy deals).
3.3 Protecting Leaseholders’ Money
The government is reviewing protections for money held in service charge and reserve accounts and exploring the use of digital banking and real-time information access.
3.4 Protections for Leaseholders Paying Fixed Service Charges
Fixed charge payers—common in retirement housing—lack some protections. The government is considering extending the right to challenge charges and ensuring transparency through new annual reports.
3.5 Powers to Appoint or Replace Managing Agents (Section 24)
Leaseholders can already apply for a tribunal to appoint a managing agent in serious cases. The government seeks to improve this process and introduce powers for leaseholders to veto or replace agents more easily.
3.6 Providing Information and Services Digitally
Most rules were designed in the pre-digital age. The government supports using email, apps, and online platforms to share information more efficiently—while ensuring access for all.
4.0 Regulation of Managing Agents
4.1 Mandatory Qualifications for Managing Agents
Managing agents will be required to achieve a minimum Level 4 qualification. These will cover legal, financial, and maintenance responsibilities. Continuing professional development will also be mandatory.
4.2 Oversight and Enforcement
Three implementation models are proposed:
- A statutory professional body system (preferred)
- A redress scheme model
- Local authority-only enforcement
Under the preferred model, all agents must join a professional body. Local authorities will have powers to enforce compliance.
4.3 Transition and Grandparenting
There will be a transition period for current agents to obtain qualifications. Existing qualifications will be recognised.
4.4 Application in Wales
Welsh Ministers may consider a similar approach. The consultation seeks views on whether and how this should apply in Wales.