The UK Government has announced that leaseholders in England will receive clearer information about service charges and stronger cost protections, with measures set to come into force as soon as possible from 2027.
New Annual Reports and Demand Forms
Following consultations with leaseholders, landlords, and industry groups, the Government confirmed it will proceed with reforms to increase transparency around service charges. Landlords will be required to provide an annual report detailing the health and condition of the building and plans for major works. A new service charge demand form will also be introduced, offering detailed breakdowns of payments and their purposes.
Enhanced Access to Building Information
Landlords must supply certain building information on request, including fire safety data and invoices for maintenance work, covering up to six years and with clear response timeframes. This aims to empower leaseholders with the information needed to challenge unreasonable charges.
Protections Against Legal Costs
In disputes over service charges, new rules will protect leaseholders from paying their landlord’s legal fees without challenge and allow them to apply to recover their own costs. This rebalancing of legal expenses is intended to make it easier for leaseholders to contest unfair charges.
Consultations on Valuation and Process Costs
The Government has launched two additional consultations: one covering England and Wales on valuation rates used in leasehold enfranchisement claims, and another on process costs in enfranchisement transactions (England only, though responses from Wales are also welcomed).
Ministerial and Expert Reactions
Housing minister Matthew Pennycook stated: “As we bring the feudal leasehold system to an end and move towards a commonhold future, existing leaseholders will not be left behind. We are acting to enable more existing leaseholders to take control of their buildings and more easily convert to commonhold... and we are strengthening protections for existing leaseholders in the here and now by driving up service charge transparency and rebalancing legal costs.”
Kion Ahadi, chief executive of the Leasehold Advisory Service, commented: “These reforms represent an important step towards a fairer and more transparent system for leaseholders.”
