Property Service Charges

Noah Law Excerpts

Thursday 30th October 2025 Commons Chamber

[Noah Law (St Austell and Newquay) (Lab)]

While we have heard countless examples of grievances about property service charges today, for many residents, this ultimately boils down to one fundamental issue: disparity. Far be it from me to play devil’s advocate for a broken sector—a market failure—but some residents do face affordable service charges, and benefit from management companies that are responsive and effective in resolving their problems; yet others, often living in similar developments, are saddled with soaring fees and management companies that are slow, unaccountable and uncommunicative, leaving basic issues unresolved for months on end. When people are forced to pay ever-higher prices for worsening service, it is no wonder that frustration and resentment towards the sector as a whole is growing.

One of my constituents recently wrote to me to say that they were alarmed by their service charge, which had risen from £161 a month to £266 the following year—a staggering 65% increase, which might be a record today. The justification provided was that the management company, which I will not name—the House can hazard a guess—had simply overspent on work that it had carried out. Such an arbitrary rise is unaffordable for so many households, and illustrates the dramatic and damaging impact that unchecked service charges inflation can have.

Beyond the question of cost lies an equally important issue: transparency. Too often, residents have no idea what they are paying for and why, as we have heard. Service charge statements are opaque, and when people ask for explanations, they are often met with obfuscation and silence.

There is also a chronic lack of oversight and accountability, and I look forward to hearing from the Minister about the potential to address that. As we have heard, when residents wish to challenge high or unjustified costs, their options for any form of recourse, except through the courts, are limited. The balance of power lies entirely with the managing agents, not the homeowners footing the bill.

Worst of all, many people discover only after moving in that the management company responsible for the estate is unfit for purpose and provides a poor and inconsistent service in exchange for their hard-earned money. Residents still have to pay council tax in addition to their service charges, leading to a feeling of being double charged. It is therefore no surprise that my constituents are crying out for a stronger ability to take on the right to manage. Areas that are managed locally are often extraordinarily effective, with better services, better value for money and better local oversight all compounding to support communities to thrive.

One of my constituents shared her frustration that her estate’s management company consistently fails to maintain communal grounds. She wrote:

“My issue is that we, the residents, have no real power or control over the management of the communal grounds, but we are expected to pay all the costs. I want that control. We should have the right to make our own choice of property manager.”

That sentiment is shared by thousands across the country. It speaks to an urgent need for regulation of a sector that has had a licence to print money. Its high yield gives private equity companies a perverse incentive dynamic, which the hon. Member for Reigate (Rebecca Paul) described so eloquently at the start of this debate. As we have heard, problems also arise from the failure of local authorities to adopt highways, which is due to the poor incentive structure.

I hope to see all these issues—particularly transparency, value for money, accountability and professional standards —addressed in the leasehold and commonhold reform Bill. After all the progress we have made on renters’ rights in the past week, the Bill represents a huge opportunity for leaseholders across the country, thanks to this Labour Government. Until we rebalance those relationships, residents will continue to feel powerless, exploited and unheard, and that is completely unacceptable.