Commonhold and Leasehold Reform: Managing Agents

Siân Berry Excerpts

Thursday 2nd July 2026 Commons Chamber

[Siân Berry (Brighton Pavilion) (Green)]

I thank the Chair of the Select Committee, the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi), whose motion, report and recommendations for the Bill I support and welcome. Thorough and fair leasehold reform is long overdue. My inbox as MP for Brighton Pavilion is littered with horror stories from constituents about their experiences as leaseholders who are forced to fork out extortionate service charges with no value for money, poor maintenance and no transparency on how that money is spent, as well as awful communications. My leaseholders continue to suffer from a lack of agency in solving the building safety scandal, which has left too many leaseholders in Brighton’s many high-rise and mid-rise blocks stuck in unsafe homes.

Some of my constituents tell me that they believe freeholders are still trying to cut corners and do this work on the cheap. Just last month I was contacted by multiple constituents about developer Barratt Redrow’s plans to remediate their blocks, built in the early 2000s, to a B1 standard, rather than to an A2 standard as they had understood would happen. This type of dispute, nine years on from the avoidable Grenfell disaster, is commonplace, and it is so worrying for too many of my constituents.

I, too, want to talk about property management agents. A large number of leaseholders in Brighton and Hove are in a nightmare situation right now of not being able to access money paid into accounts managed by just one large property management company in sudden crisis. Under current leasehold regulations, when a managing agent’s client accounts are frozen, or irregularities are identified that suggest mismanagement of accounts, leaseholders are left exposed to very big financial losses.

In the private rented sector, there is a Government-backed tenancy guarantee scheme, but for leaseholders there is no equivalent guarantee on service charge accounts and reserve funds. Section 42 of the Landlord and Tenant Act 1987 does require property management companies to hold service charge contributions in trust and with a financial institution authorised under the Financial Services and Markets Act 2000. Yet the flexibility of how leaseholder money is held in reality means that the sums of money in property management company accounts may far exceed the maximum amounts guaranteed under the financial services compensation scheme. Section 156 of the Commonhold and Leasehold Reform Act 2002 adds a requirement for managing agents to hold service charge funds in designated separate accounts, but it is not yet in force. This lack of enactment seems to leave wide open the potential for managing agents to hold leaseholder money in a way that falls outside of compensation schemes. It cannot be right that leaseholders are left exposed to risk in that way.

To conclude, there is no doubt that the feudal leasehold system is broken and must be abolished in favour of commonhold. The regulation of managing agents to end their exploitation is very, very urgent. The promises that the Government made in opposition, to end the system within the first 100 days, were missed long ago, but we need full reform now, without delay, to ensure an end to leaseholders being ripped off, living in unsafe homes or being exposed to avoidable financial risk and losses.