The UK Government has confirmed that new leasehold rules will come into force as soon as possible from 2027, aimed at improving transparency and protections for leaseholders in England. The measures follow a consultation with leaseholders, landlords, and industry groups.
Annual Reports and Service Charge Demands
Landlords will be required to provide an annual report to leaseholders, offering clear insight into the condition and health of their property and plans for major works. Additionally, a new service charge demand form will set out detailed information about service charge payments and what they will cover.
Landlords must also provide certain building information upon request, such as fire safety details and invoices for maintenance works, going back up to six years, with clear timeframes for responses.
Dispute Resolution and Legal Cost Protections
Where disputes arise over service charges, new rules will shield leaseholders from footing their landlord's legal bills without challenge, and enable them to apply to recover their own costs. This aims to empower leaseholders to challenge unreasonable charges.
Consultations on Enfranchisement
The Government has launched two consultations: one covering England and Wales into valuation rates used in leasehold enfranchisement claims, and another into levels of process costs paid in enfranchisement transactions. The process costs proposals are for England only, but the Government welcomes responses from Wales.
Ministerial and Expert Statements
Housing minister Matthew Pennycook said: "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 as and when they judge the time is right for them, and we are strengthening protections for existing leaseholders in the here and now by driving up service charge transparency and rebalancing legal costs so that leaseholders are empowered to challenge unreasonable charges."
Kion Ahadi, chief executive of the Leasehold Advisory Service, added: "These reforms represent an important step towards a fairer and more transparent system for leaseholders."
