Property Service Charges

Joe Powell Excerpts

Thursday 30th October 2025 Commons Chamber

[Joe Powell (Kensington and Bayswater) (Lab)]

I join others in congratulating the hon. Member for Reigate (Rebecca Paul) on securing this debate. I know that leaseholders across the country will be watching this debate very closely, because the cost of being a leaseholder has contributed to the cost of living challenges that so many of our constituents have faced for such a long time.

My leaseholder action group in Kensington and Bayswater, which the Minister kindly met with recently, regularly shares stories of escalating, unaccountable and untransparent service charges levied by managing agents that they have no control over. At worst, the current system can represent a cartel, with a broken market in which competition between managing agents is undermined by monopoly-type relationships with some freeholders and a broken connection between those who pay the bills and those who deliver the services.

The impact can be devastating. One of my constituents, Adriana, has taken her housing provider to tribunal three separate times simply to get clarity on how her service charge was calculated. Each time she has won, but the housing provider is still not providing the information; indeed, it is now offering to withdraw all the charges, rather than provide that information. That is not transparency: it relies on the assumption that the other residents, many of whom are elderly or financially strained, will not have the resources to challenge. Rather than giving up, Adriana now supports other residents in helping them to understand their rights and how to contest these unfair practices. Her determination is admirable, but it should not fall to residents themselves to protect one another from a system that is supposed to protect them.

Another group of residents who speak to me regularly about these issues, who live in a building called Shaftesbury Place, have been hit with crippling increases to their charges after a 2,489% increase in their building insurance premium. That annual cost, which is up from £15,000 to £375,000 a year, has been passed directly to the leaseholders through their service charges. The housing provider says that the freeholder procured the insurance—the residents have seen evidence suggesting otherwise—but the confusion over who procured the insurance and how the premium was calculated has left leaseholders caught in the middle. The justification appears to rest on a fire risk assessment that many residents believe is flawed, but the result is that ordinary homeowners, including shared ownership homeowners trying to climb the ladder, have been left with unaffordable bills and no clear line of accountability for how those costs have been allowed to spiral.

[Anna Dixon (Shipley) (Lab)]

I commend my hon. Friend for explaining the problems so clearly, problems that are shared by my elderly residents in Aire Valley Court and Sutton Court in Bingley. They too have seen above-inflation rises in service charges and a lack of transparency about accounts, with no evidence to justify them. Does my hon. Friend agree that it is now time that we bring in licensing and stronger regulation of managing agents such as FirstPort?

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[Joe Powell]

I agree entirely with my hon. Friend. There is now an overwhelming case for introducing mandatory professional standards—which I know the Government are bringing forward—and for considering what regulation might look like, whether that is a new regulator or expanding on the current system. It is clear that some of the suggestions that the Government have consulted on in their “Strengthening leaseholder protections over charges and services” consultation have the potential to deliver for residents such as mine and my hon. Friend’s. That includes a right to veto their property agent, and I hope the threshold for that will be set at a level that will work in places such as my constituency. With a large number of overseas and absent owners, reaching high thresholds can be challenging, so I hope the threshold will be accessible. My constituents would appreciate hearing from the Minister—or from a different Minister at a later stage—about our progress on tackling the issue of building insurance. It is a big issue, particularly for metropolitan Members of Parliament. Of course, that must go hand in hand with continuing on the path to full reform of the system. I was delighted by the High Court’s decision to comprehensively dismiss challenges to the Leasehold and Freehold Reform Act 2024. That is a vital step that will enable progress towards implementing reforms that will make it easier and cheaper for leaseholders to extend their lease or buy their freehold. I hope it will smooth the way for a new Bill that will deliver on our manifesto commitment to leaseholders—to

“bring the feudal leasehold system to an end”

in this Parliament. I am incredibly proud of that commitment, and I know that millions of leaseholders watching this debate also want to see it delivered. It is something that previous Governments promised, but failed to deliver.

This Government have already taken decisive action to dramatically improve the rights of 4.6 million private rented households in England by abolishing no-fault evictions, increasing security in tenancies, and ensuring safe and healthy homes for all. We have taken action to dramatically improve the rights of 5 million social rented households in England by bringing Awaab’s law into force, guaranteeing emergency repairs within a statutory timeframe. Now, we have the opportunity to deliver on our promise to the 5 million leasehold households, too.