Property Service Charges

Judith Cummins Excerpts

Thursday 30th October 2025 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Judith Cummins)]

Order. With an immediate five-minute time limit, I call Ms Julie Minns.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Judith Cummins)]

I am imposing an immediate four-minute time limit.

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[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

[Gideon Amos (Taunton and Wellington) (LD)]

I warmly congratulate the hon. Member for Reigate (Rebecca Paul) on securing what, given the number of Members taking part, has clearly been an important debate.

Liberal Members of this place have been campaigning to end residential leasehold and the charges it entails since Lloyd George, who, at the time his People’s Budget in 1909, said that the practice

“is not business, it is blackmail... Ground rent is a part of it—fines, fees; you are to make no alteration without…consent.”

His words ring true today. Over a century later, we still have the same feudal system, and charges that trap homeowners in a cycle of uncapped ground rents, exploitative charges and similarly unreasonable estate management fees.

The scale of the problem is staggering—there are 4.8 million leasehold properties in England, which is more than a fifth of the housing stock—but England, Wales and Australia are the only countries still operating such residential leasehold approaches. Most other countries are perfectly able to ensure building maintenance and safety without relying on such outdated practices. One of the things I hear most often from my constituents is how long it takes to get change in this place, and property service charges are a perfect example. They have been around for decades, but very little seems to have happened.

In 2019, the Government commissioned the independent Lord Best to write a report, and he laid out sensible solutions and a clear path ahead: a new property regulator to establish a code of practice, the licensing of property managers and agents, and minimum qualifications for those working in the sector.

While I acknowledge the last Government’s work in this area, it took them five years to bring forward legislation, and when they did in the form of the Leasehold and Freehold Reform Act 2024, they completely neglected to regulate property management or spiralling service charges. That is a measure of how leaseholders have been let down despite the overwhelming evidence of the need for action. The Labour Government promised that they would implement the rest of the Act, but well over a year later little progress has been made—progress that would give redress to those saddled with charges they cannot contest and marriage values that are wholly unreasonable. These delays are failing the people who are trapped in these properties.

Recently, I heard from one constituent about their experience of leasehold service charges. When they purchased their property in 2022, the service charges were £1,700. In 2023 they rose to £2,600, which is a 52% increase. The next year they went up to £3,700, which is a further 43% increase. The following year—2025—they reached £5,010, which is another 34% increase. Overall, the service charges tripled in just three years, and for what? After a huge effort by residents asking to see quotes and invoices, it turns out that the answer was that it was for nothing—or rather for incompetence and, as Lloyd George might have put it, for greed. There were invoices relating to other buildings entirely and gaping differences between maintenance quotes and actual costs.

Eventually, through the right to manage, the residents appointed a new managing agent and got their charges back down to around £2,000. That means that over those four years, residents paid approximately £13,000 in service charges. If the charges had remained at the proper level, it would have been £2,000 a year, so they have overpaid by £5,000 each and they will never get that money back. The money went straight into the pockets of unregulated managers. That is the cost of delay —it is a real cost being borne by constituents of mine and other Members.

The constituent said to me that the process was akin to having a full-time job, which is an entirely unreasonable way for the property industry to be working—and what about residents who are less able than my constituent? Some residents may be older or in poor health, or simply ill-equipped for the massive task of navigating that bureaucracy. They may be so busy with work or children that they do not know they have been ripped off until it is too late. Folk should not have to devote that level of time and energy to get redress.

The issue of fleecehold, which has been referred to by hon. Members, including my hon. Friends the Members for Surrey Heath (Dr Pinkerton) and for Honiton and Sidmouth (Richard Foord), must not be forgotten. Companies such as FirstPort have been mentioned, and I assure Members that they are as much of a problem in Taunton and Wellington as they are elsewhere. Freeholders often have even fewer rights to challenge estate management charges than those who have leases. The arrangements operate almost like leaseholds. Such residents pay double—both their council tax and estate management charges—and often receive a far worse service than those who live on estates fully adopted by a local authority, where the only charge is council tax. They have all the financial burdens of leasehold without the legal protections. Another constituent—a freeholder in Taunton—has been awaiting the regulations for years now so that he can take his case to tribunal.

Even the rights that exist on paper are worthless without effective enforcement. Currently neither leaseholders nor those paying estate management charges have any easy way to ensure that their rights are upheld. That is why we need both the provisions of the 2024 Act to be commenced, and an independent regulator with teeth and the ability to cap unreasonable charges levied on both leaseholders and freeholders. Even the British Property Federation said back in 2023 that

“the lack of any provision to introduce competency standards or regulation to our sector is a missed opportunity.”

The Property Institute has welcomed proposals for oversight. When even those who would be regulated are asking for it, surely it is time to act.

The Government rightly have an ambition to build 300,000 new homes a year, but we Lib Dems would prefer that to include a stretching target of 150,000 social homes. We agree that homes are needed. However, in building them we must not create a next generation of fleecehold properties. The practice of developers building estates with shared roadways and public spaces, then retaining ownership through management companies and charging residents for their upkeep while those same residents are paying council tax, has to end. For the vast majority of standard developments, there needs to be a presumption that shared areas must be adopted by the local authority. Crucially, councils need to be given the proper resources to allow that; the ability to recoup the costs of managing those spaces from developers or landowners; and powers to sanction those who fail to complete roads and similar infrastructure to the right standard. We cannot allow developers to profit from management companies, while residents pay twice for the same services.

It has been 116 years since Lloyd George called out these practices. We have had six years since Lord Best’s report laid out a clear path forward. We have had over a year with the new Government in office. The evidence is overwhelming and the solutions are clear. Liberal Democrats are therefore calling for: a new property regulator, as recommended in the Best report, establishing a code of practice, minimum qualifications and the licensing of property managers; leaseholders to be enabled to get alternative quotes for maintenance; a power for residents to act in common to take ownership of management companies and common areas; the strengthening of councils’ powers to adopt, with resources from developers or landowners; the urgent abolition of ground rents for existing residential leases; and, crucially, the capping of unreasonable service and estate management charges.

Millions of leaseholders and freeholders are waiting. They have waited long enough. It is time for the Government to act and end what has become the great British property rip-off.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Secretary of State.

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[Madam Deputy Speaker (Judith Cummins)]

I call Rebecca Paul to wind up.