Property Service Charges

Samantha Niblett Excerpts

Thursday 30th October 2025 Commons Chamber

[Rebecca Paul]

I thank my right hon. Friend for providing that very useful context. I will come on to that in my speech. One of the challenges we have is that property service companies are seeking to make a profit, yet they are unregulated and free to do as they will. It is for this place to get a handle on that. I hope that today we can think constructively about potential solutions to address the problem, the scale of which, across the House, we all recognise. We do not want our constituents to continue to face it. I am afraid to say that FirstPort is not covering itself in glory. I have now heard hundreds of times over about its lack of responsiveness, lack of transparency on costs and inadequate explanations of service charge increases. Residents have told me about being billed for services they have never received, like window cleaning, with no avenue to formally challenge and remediate. Any opportunity to charge a resident is used to the full.

These things are all symptomatic of an industry that prioritises extracting maximum value from leaseholders, regardless of the human cost. There is no incentive for property service companies to act any differently. It is incredibly hard for leaseholders to remove them, so the companies have free rein to do pretty much what they like. This fundamental power imbalance must be addressed, and it must be made easier for leaseholders to take their business elsewhere.

The Park 25 service charge for the year ending 30 April 2026 is estimated to be just under £1.9 million— 13% higher than last year’s estimate. The increase in costs is primarily to cover the future replacement of playground equipment, street lighting, road repairs and other infrastructure. Park 25 residents are also paying council tax for exactly those types of things outside the estate. Out of the £1.9 million service charge, FirstPort keeps around £142,000 in fees, which works out at just under 8% of the total service charge. How easy was it for me to find that £142,000 figure in FirstPort’s costs breakdown? Not very—I had to total up numbers across many pages of costs, as there is no nice, neat summary at the front showing the total amount.

That 8% may or may not be out of kilter with industry—I found it difficult when researching to confirm one way or another, which is an issue in itself. The key point to recognise here, though, is that there is absolutely no incentive or requirement for FirstPort to keep the cost base low. In fact, the more money it spends on maintaining the estate and the more people it employs to deliver services, the smaller the percentage proportion its management fee appears to be—a perverse incentive indeed.

It would be very easy for me to berate property service companies throughout my speech, and I suspect that others will take up that mantle during the debate. However, we must recognise that it is the current system that allows the companies to operate in this way.

[Samantha Niblett (South Derbyshire) (Lab)]

South Derbyshire district council has taken the bold and rather commendable decision to ban any new property management fees, and to backdate that to January 2025. However, that does not help those who already have homes they bought before 2025. Does the hon. Lady agree that we should press our Government to legislate to help those who are tied into these arrangements to come out of them?

[Rebecca Paul]

I thank the hon. Member for that point. An important debate for us to have today is about what we do going forward, both for those who have not yet bought a leasehold and to help our constituents who are in this situation right now. I am really interested to hear everyone’s views on that.

These companies are a symptom of the problem; they are opportunists making money from an inequitable system. It is this House that must take responsibility for addressing the intrinsic unfairness and urgently make the changes needed to unshackle leaseholders. I hope that we will today hear hon. Members’ views on the solutions, not just the issues. We cannot keep building new housing estates under this same model, perpetuating the problem. This is increasingly important in the light of the Government’s ambitious plan to build 1.5 million new homes over the next few years. I have to say, if nothing has changed when the time comes for my children to purchase a property, I will be strongly advising them not to purchase a leasehold on a private estate.

To start us off, I will give the House my view. I think making it easier for leaseholders to change property service company is important, as is better regulation and higher standards, but that will not fundamentally transform the situation. What is needed—what is critical—is a change to the default model, so that homeowners are not paying both the council and a private company for the exact same services.

One sensible and equitable option would be that local authorities are obliged to adopt communal land and infrastructure on completion of new estates in all but the most exceptional cases. For that to work in practice, developers would need to be obliged to ensure that the infrastructure meets the council’s standards before transfer. That way, owners of leasehold properties would be put on an equal footing with everyone else, paying for communal services once through their council tax. That would certainly deal with future issues.

But what about those who, like our constituents, are already trapped? It may be that something more radical is needed, such as a mandatory direction to all local authorities to adopt communal land where requested by existing estates. It would be difficult, I know, in this current financial environment and with the likely variability of estate quality, but it would certainly address much of the issue and allow my constituents to sell their properties and move on with their lives.

I know that this Government are also keen to move forwards and towards commonhold arrangements, especially for flats, which essentially put management of the estate in the hands of leaseholders themselves. There are some benefits to commonhold over the current model, but it is not the silver bullet that is needed and brings its own set of problems. Anyone who, like me, has been involved in a residents’ association or similar organisation—or, indeed, who simply understands human nature—will know that most people do not want to pay out for significant works, so the works will not get done, which in time will result in crumbling roads, failing roofs and falling home values. Again, it will become difficult for residents to sell their properties. It is just another version of the same trap, and one that pits neighbours against each other. I urge the Government to think again on plans to make commonhold the default tenure for new build flats.