Commonhold and Leasehold Reform: Managing Agents

Andrew Cooper Excerpts

Thursday 2nd July 2026 Commons Chamber

[Andrew Cooper (Mid Cheshire) (Lab)]

Trust in politics is at an all-time low, and part of the reason is that our society is littered with examples of structural unfairness, injustice, and ordinary people being ever so slightly fleeced. The housing market of recent years is a strong case in point, with multiplying ground rents, abuse of the forfeiture system, opaque service charges, management companies that cannot be changed, overpriced maintenance performed by firms connected to the management company, no adoption of common assets, short leases and exorbitant lease extension fees—the list goes on.

It has been a privilege to have played my part in scrutinising the draft Bill, because it represents an opportunity to put a significant dent in some of these practices, and to demonstrate that politics and politicians can deliver for people and change lives for the better. As my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) has set out, the Committee took evidence from an extensive array of witnesses on the measures in the Bill, and I thank them for their contributions.

I will draw out a few specific points from our report. First, the reinvigoration of commonhold that this Bill will deliver has rightly been described not just as an alternative to leasehold, but as a radical improvement on it. For it to be implemented successfully, considerable work needs to be undertaken at the Land Registry to make sure that it is ready to respond, not just to the registration of new commonhold, but to the conversion of existing leases. Our Committee found that a failure to modernise the Land Registry’s legacy systems would pose a significant risk to commonhold working. Good-quality public access systems will be crucial.

My second point is on the ground rent cap. It is fair to say that the Committee spent a lot of our time attempting to get to the bottom of the Government’s rationale for their proposals. I support the proposal to adopt a flat cap of £250, rather than the cap being a percentage of property value. However, I have struggled to understand the rationale behind waiting 40 years before converting to peppercorn rent. I can understand the desire to give certainty and predictability to investors, and I can understand an argument that investors need time to adapt to such changes, but the last three successive Governments were elected on a mandate to address onerous ground rents. The ground rent system, as my hon. Friend said, was condemned by the Competition and Markets Authority, which said that it could find

“no persuasive evidence that ground rent was either legally or commercially necessary, or that consumers received anything in return”.

It should not be a surprise to anyone to hear that the days of ground rent are numbered. I cannot think of a single other example of a Government being so generous as to provide 40 years’ notice of a change to terms of business. Governments have not done that for students on plan 2 loans, for example, or for those affected by the rising pension age. The previous Government thought 20 years’ notice was sufficient, and I am minded to agree with them, unless the Department can bring forward more evidence on its rationale.

My final point is on the absence from the Bill of measures to regulate property management agents. Everyone in the House knows that that change is long overdue. We have Lord Best in the Gallery today. His excellent 2019 report set out the case for regulation clearly, as did my hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales), following his work on his private Member’s Bill. I understand the concern about the size of the Commonhold and Leasehold Reform Bill as it stands, and that adding these measures would create further delay. All I say in response is that we have the opportunity and the responsibility to act. No time has been set aside in the King’s Speech for a separate regulation of property agents Bill, so I hope that the Minister will seize the opportunity in front of him, and chip away at another practice that blights the lives of our constituents and undermines trust in institutions’ ability to deliver for them.

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[Justin Madders (Ellesmere Port and Bromborough) (Lab)]

I start by referring the Chamber to my chairmanship of the leasehold and commonhold reform APPG, where I work closely with organisations such as the Leasehold Knowledge Partnership and the National Leasehold Campaign, to which I pay tribute.

As we have heard, complaints from constituents about management companies and the exorbitant fees they charge are something that we all deal with on a weekly basis. It is not a new phenomenon; it is something that I raised on the Floor of the House five years ago because I could see it becoming the next big scandal, and sadly that has come to pass.

Homeowners who buy their homes in good faith understandably expect to live in a functioning estate where responsibilities are clear and, where necessary, charges are fair. All too often, the opposite is the case. Homeowners are left in the pernicious situation of paying for services once in their council tax bill, and once again in extortionate service charges. Poor services are often exacerbated by a lack of accountability. Residents are forced to persistently chase matters, while frequently being passed from one organisation to another without resolution. But as soon as residents fall behind with a payment, these companies leap into action, often using aggressive debt collection tactics. Adding insult to injury, the financial structures of these estates are all too frequently opaque: governance structures lack transparency; companies are labelled as dormant for accounting purposes; and dodgy practice—where freeholders, management companies and debt recovery companies operate in an interconnected web—allows them to rack up eye-watering fees.

I will cite one very recent example from my constituency, where a constituent owed some service charges to RMG, with which I think we all are familiar. Looking at his bill, the constituent had been charged an instruction fee and a client admin fee on top of his service charges, adding another £600 to the bill, yet RMG had somehow managed to inflate the £1,100 owed in service charges to £3,300 by the time court papers were issued. There is no world where a trebling of this sum can be justified, and it just shows what a scam the system is.

Time and again, I see people raising problems from a range of new build developments in my constituency, including Ledsham Garden Village, Mersey View and Jacks Wood estates, where homeowners face a range of challenges. In Ledsham Garden Village, residents are facing combined service charges and fees running into hundreds of thousands of pounds, although only a fraction of the spending can be accounted for, which just rubs salt into the wound. Residents do not have any idea how the money is being spent and if it is being spent on the estate at all; they do not know whether the company is getting best value for money, how reserves are being used or how costs are allocated over different phases of the development. There are persistent maintenance issues, inconsistent grounds maintenance and safety concerns because of poor traffic management. People who buy their homes in good faith deserve better. Then there are the Jacks Wood estate in Ellesmere Port and the Mersey View estate in Bromborough, where the adoption process has effectively stalled, leaving residents in limbo.

The regulation of managing agencies is clearly something this House would like to see, but I would like to make some further suggestions. We could introduce standard costs across the country for estate management fees so that there would be a baseline from which to judge these companies. Residents could be given a far greater say over who manages their estate. We could have three-yearly ballots in law on whether they wish to carry on with the same management agents, which could end the “put up or shut up” approach that a lot of these companies adopt. As we have heard suggested today, an immediate step the Government could take would be to make it a condition of any planning permission moving forward that the developers must hand over the whole estate adoption to the local authority and pay a commuted sum for it, ending that revenue stream entirely.

[Andrew Cooper]

On the point about estate adoption, I wonder whether my hon. Friend agrees that we need to get on and implement section 42 of the Flood and Water Management Act 2010, which would require sewerage to be adopted as part of the public sewer as soon as possible.

[Justin Madders]

Yes, indeed. Residents of an estate in Eastham have been paying for a sewer that they cannot actually locate, which just shows that there is too much ambiguity over what these charges are for.

Finally, local authorities could be given powers to use their resources to bring estates up to an adoptable level and then charge the developers for that work retrospectively. The developers do not want to do it, and we need to find a way of breaking that logjam. These are just some of the measures that, alongside the many welcome reforms from this Government, would improve the lives of hundreds of thousands of people.