The UK government announced new measures aimed at protecting leaseholders from excessive fees and introducing stricter regulation of estate and letting agents. The proposals were outlined by Housing Secretary Angela Rayner at the Labour Party conference in Liverpool.
Under the planned reforms, the government intends to cap “permission fees and administration charges” that freeholders impose on leaseholders for merely seeking approval to make alterations to their properties. Rayner cited an analysis by Propertymark, a property agents’ professional body, which found that one in ten leaseholders had been charged for basic requests, with some inquiries resulting in fees averaging between £252 and £1,422. Examples include charges for permission to install double glazing, change kitchen units, or even keep a pet.
Rayner described these fees as indicative of leaseholders’ “powerlessness” in the face of vested interests and announced a forthcoming consultation to identify acceptable charges and set caps accordingly. Leaseholders—who occupy properties on fixed-term agreements while freeholders retain ownership of the land and common areas—account for about 20 percent of homeowners in England and Wales. The average service charge for leaseholders has risen sharply in recent years, reaching a record average of £200.42 per month for flat leaseholders, according to data from property consultancy Hamptons.
To improve transparency, the government will require freeholders to provide annual reports on building conditions and detailed explanations to justify service charge demands. Additionally, a forthcoming Commonhold and Leasehold Reform Bill aims to simplify the process for leaseholders to collectively purchase their freehold interests.
The legislation will also introduce licensing and qualification requirements for estate and letting agents, a move intended to curb malpractice within the property sector. Rayner criticized unqualified and unregulated agents for “mishandling” client funds and benefiting from a lack of accountability. She emphasized the need for transparency and regulation to prevent exploitation.
Industry leaders expressed support for these changes. Tim Hyatt, head of residential at Knight Frank, said enhanced regulation and greater fee transparency are crucial for the sector’s future. Jason Charles, head of education at Rightmove, noted that demand for formal qualifications among agents has surged by 128 percent over the past year, reflecting a growing push towards professionalism since such programs became available in 2022.
The proposed reforms represent the government’s ongoing efforts to address concerns around rising housing costs and improve protections for leaseholders and property consumers across England and Wales.