‘Ending leasehold abuse is central to tackling the housing crisis and cost of living’

Across the Labour movement, all of us are agreed that tackling the cost-of-living crisis is essential to restoring public confidence in us. 

It has been the singular focus of the Prime Minister since the start of the year, and recent cuts in the energy price cap and mortgage costs show a government geared for delivery. 

Tackling housing costs is key to this agenda. They are cited as a top issue for the public in their cost of living priorities, and disproportionately so among 2024 Labour voters. 

Service charges comprise a significant percentage of these, not just for the 5 million leaseholders in England and Wales, but for many of the 4 million private renters living in leasehold homes. 

Service charges have increased at four times the rate of inflation. Often the drivers behind this are legitimate, such as energy prices and buildings insurance, which have increased substantially since the war in Ukraine and the Grenfell Tower fire respectively. 

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But increased attention on service charges has lifted the lid on a wide variety of unscrupulous actors in charge of the management of leasehold properties, as well as ‘fleecehold’ freehold homes on estates whose amenities are not run by councils. 

Campaigning on leasehold and fleecehold over the past year, I have seen just how bad some of these practices can be. I have spoken to residents who have had to deal with sewage leaking into their flats for months because of ignored complaints of broken pipes. I have seen evidence of agents double-charging for energy to the tune of nearly a million pounds over several years. And I have heard from a pregnant couple who received threatening letters from an agent’s law firm demanding payments which had already been made, only for the cost of those letters to be recovered from their service charges. 

What’s more, many of these managing agents are doing little to generate the growth or secure work that are rightly a key part of our economic mission. FirstPort, the largest managing agent in the country, is owned by the French property consortium Emeria Group, and reported a £22.4 million loss in 2024.

And managing agents’ employees are frequently faced with insecure demanding work. Too often good, well-intentioned managers are overworked and forced into long-term incapacity due to the unviable business practices of the organisations that employ them. 

Labour is coming to the aid of leaseholders. The Government’s Leasehold and Commonhold Reform Bill will ban new leasehold flats and reinvigorate commonhold, a model of resident ownership, to allow for leasehold’s abolition. But less well known is the service charge consultation – published last year to tackle these high prices head-on. 

The measures in this consultation will radically improve the lives of leaseholders. They include transparency of charging, through standardised reporting and detailed itemisation, mandatory professional qualifications for managing agents, backed up through a new regime of regulation, and a right to veto agents, either by requesting that a freeholder changes agent or through objecting to a new agent being imposed. 

But going even further than this would make a meaningful difference in residents’ cost of living. With a ‘better than expected’ outcome from this consultation, Labour can continue to drive the narrative that it is on the side of working people, particularly the leaseholders who have had reform promised and not delivered for far too long. 

What would this look like? 

Three clear shifts would show that Labour is serious about taking the poor practice in this sector seriously. 

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First would be the introduction of a standalone regulator of managing agents. The regime proposed in the consultation is that of regulation through designated professional bodies and enforced through trading standards. Rather than this patchwork, a simple body which stands apart from the sector, with clear leadership and a remit for major reform, would be a clear signal that Labour means business. 

Second, a complete crackdown on uncompetitive practices. Leaseholders are all too aware of what these look like: freeholders can employ managing agents that they own; agents can procure buildings insurance through brokers with linked financial interests; and sometimes managing agents can even have themselves written into the leases of large estates. These practices are brazenly anti-competitive, and bad for residents and growth alike. They need to be stopped. 

Finally, the proposed right to veto should also protect residents from mergers and acquisitions. These are all too common, and some of the worst stories I have heard start with a good agent being acquired and hollowed out by a larger, less accountable alternative. Extending the new right to veto to these practices would protect residents from these cases, and significantly disrupt the merger culture among managing agents. 

This Government is more committed than any in my lifetime to ending the housing crisis, and its energetic and thorough approach to leasehold is a clear sign of this. Through taking on the worst actors in the managing agents sector and fighting back against the rising tide of service charges, it can show to voters that it is serious about tackling the driving forces of the cost of living crisis.

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