New Leasehold Reforms 2026: Stronger Rights, Clearer Service Charges and Greater Protection for Leaseholders

For millions of leaseholders across England and Wales, service charges, building insurance costs and legal disputes have long created frustration, confusion and financial uncertainty.

Leaseholders may be required to contribute substantial sums towards the management, maintenance and insurance of their buildings. However, many still struggle to obtain straightforward explanations showing where their money has gone, why particular works are needed or whether the amounts demanded are reasonable.

The Government has now announced stronger protections intended to make service-charge information clearer, improve access to important records and rebalance the legal-cost rules that can discourage leaseholders from challenging unreasonable charges. The reforms form part of the implementation of the Leasehold and Freehold Reform Act 2024 and the wider programme to move England away from the traditional leasehold system.

At My Estate Luton, our Director, Richard Gedall MNAEA | AARLA, has seen first-hand how unclear accounts, poor communication and reactive building management can leave leaseholders frustrated and financially exposed.

Richard is supported by a hardworking My Estate team covering block management, property management, inspections, administration, finance, sales and lettings. The work carried out behind the scenes by our staff is central to the service we provide. They inspect properties, organise compliance records, communicate with residents, obtain contractor quotations, monitor outstanding repairs and help ensure that important matters do not simply disappear into an inbox.

These reforms are therefore not just an administrative change. They represent an opportunity to create a fairer, clearer and more accountable relationship between leaseholders, freeholders, resident-led companies and managing agents.

Why are stronger leaseholder protections needed?

The leasehold system has historically left many flat owners with limited direct influence over how their building is managed.

Although a leaseholder owns the right to occupy their property for the remaining term of the lease, responsibility for managing the structure and communal areas will usually rest with the freeholder, a resident management company, a Right to Manage company or an appointed managing agent.

These responsibilities may include:

• Maintaining the roof, structure and exterior
• Cleaning and repairing communal areas
• Arranging buildings insurance
• Employing contractors
• Managing reserve or sinking funds
• Planning major works
• Collecting service charges
• Managing health and safety obligations
• Enforcing the terms of the leases

This arrangement can work well when the building is properly inspected, expenditure is planned, accounts are clear and residents receive regular communication.

Problems arise when bills are difficult to understand, supporting information is withheld or delayed, major works are announced without adequate preparation or leaseholders believe that they are paying excessive costs while receiving a poor standard of service.

The reforms are designed to give leaseholders more useful information and stronger tools to examine the decisions being made on their behalf. Government guidance says the changes are intended to improve transparency around service charges and building insurance while making it easier to challenge questionable expenditure or poor service.

Clearer and more consistent service-charge information

One of the most important changes concerns the presentation of service-charge demands and annual financial information.

The quality of service-charge reporting currently varies considerably between buildings and managing agents.

Some leaseholders receive a detailed annual budget, explanatory notes, reserve-fund information and year-end accounts. Others may receive little more than a demand for payment with limited explanation about how the figure was calculated.

The Government intends to introduce a clearer and more standardised approach to service-charge information. This should make it easier for leaseholders to understand what they are being charged for and to compare budgeted expenditure with the actual money spent.

A useful service-charge statement should help residents identify:

• The accounting period covered
• The total amount demanded
• The services included
• The budget for each category of expenditure
• The actual cost incurred
• Contributions to reserve or sinking funds
• Buildings-insurance costs
• Management fees
• Major variations from the original budget
• Any outstanding or anticipated works

The aim should not simply be to produce more paperwork.

Transparency only works when information is presented in a form that an ordinary leaseholder can understand. Providing hundreds of pages of invoices without a clear summary may technically disclose information, but it does not necessarily help residents understand what is happening.

Richard Gedall believes that service-charge reporting should answer three basic questions:

What was the money collected for?

What was it actually spent on?

What is likely to be required next?

At MyEstate Luton, our finance, administration and property-management staff work together to help maintain a clear trail between budgets, contractor instructions, invoices and communication with residents. This collaborative approach matters because good block management cannot be delivered by one person working alone.

Annual building-condition reports and forward planning

Another important proposal is the introduction of annual information about the condition of the building and significant works that may be required.

For many leaseholders, one of the greatest frustrations is receiving a substantial demand for major works with little advance warning.

A roof replacement, external redecoration programme, lift refurbishment, drainage repair or fire-safety project may be genuinely necessary. However, the cost can still cause serious difficulty when residents were not warned that the work was likely to be required.

Annual building-condition reporting should encourage freeholders and managing agents to take a more proactive approach.

A useful building report may include:

• The present condition of the roof
• External walls, windows and drainage
• Communal corridors and staircases
• Fire doors and emergency lighting
• Alarm systems and safety equipment
• Internal and external decorations
• Lifts, entry systems and gates
• Known defects or maintenance risks
• Works likely to be required in future years
• The estimated financial impact
• Whether sufficient reserve funds are available

No report can predict every emergency. Buildings can suffer unexpected leaks, failures, storm damage and other urgent problems.

However, regular inspection and forward planning can reduce the likelihood of manageable defects developing into expensive emergencies.

Richard Gedall considers annual building-condition reporting one of the most valuable elements of the reforms because it should encourage managing agents and freeholders to identify problems earlier and give leaseholders more time to prepare for future costs.

This is also where the My Estate inspection team plays an essential role.

Our inspectors work hard on the ground, visiting properties, documenting defects, checking communal areas and reporting problems that may otherwise go unnoticed. They provide the practical information that allows Richard and the wider My Estate team to make informed decisions, communicate with clients and arrange appropriate follow-up action.

A managing agent cannot properly manage a building solely from behind a desk. The condition of the property must be seen, recorded and reviewed.

Better access to historic service-charge records

Leaseholders are also expected to benefit from improved access to historic service-charge information.

This can be particularly important when someone is:

• Investigating previous expenditure
• Challenging a current demand
• Purchasing a leasehold property
• Selling a flat
• Forming a Right to Manage company
• Reviewing the performance of an existing managing agent
• Preparing for major works

Historic records can reveal whether maintenance has repeatedly been delayed, whether reserve funds have been maintained, whether budgets accurately reflected final expenditure and whether particular costs have risen without an adequate explanation.

They may also show:

• Previous major-works projects
• Patterns of contractor expenditure
• Changes in management charges
• Recurring insurance increases
• Historic arrears
• Previous disputes
• Long-standing building defects
• Whether money collected for specific purposes was properly accounted for

Access to this information can be especially valuable for prospective purchasers.

A leasehold flat may appear affordable based on its sale price, but the true financial position cannot be assessed without understanding the building.

A buyer should know whether the roof needs replacing, whether the reserve fund is sufficient, whether the block has significant arrears or whether expensive safety work is anticipated.

The reforms should make it easier for leaseholders and buyers to obtain a clearer picture of the building’s financial and physical condition.

Greater transparency around buildings insurance

Buildings insurance has become one of the most disputed areas of leasehold management.

Leaseholders will usually contribute towards the building’s insurance premium through the service charge. However, they may have limited involvement in selecting the insurer or understanding how the policy was arranged.

The Government’s reforms are intended to improve transparency around insurance information and related costs.

Leaseholders should be able to understand:

• The identity of the insurer
• The total annual premium
• What the policy covers
• How their contribution was calculated
• The policy excess
• Significant exclusions or conditions
• Any fees or commissions connected to the arrangement
• Whether alternative terms or quotations were considered

A high premium is not automatically evidence of poor management.

Insurance prices may be affected by the height, construction, claims history, fire-safety position and general condition of the building.

However, whoever arranges the policy should be able to show that the cover is suitable and that the cost has been properly considered.

Through its block-management work, MyEstate Luton reviews insurance documents, service-charge expenditure, contractor costs and compliance records. Richard Gedall’s position is straightforward: higher costs may sometimes be justified, but they must be explained and supported by evidence.

Our administrative and finance teams work hard to collect and organise this information so that clients are not left searching across different emails, files and contractors for basic answers.

Making it less risky to challenge unreasonable charges

Leaseholders already have the right to question service charges and, where appropriate, challenge whether they are reasonably payable.

In practice, some residents have been discouraged from taking action because they fear that the landlord’s legal costs may ultimately be passed back to them through the lease.

The Leasehold and Freehold Reform Act 2024 contains provisions intended to remove the automatic presumption that leaseholders should pay their landlord’s litigation costs. The reforms also create a route for leaseholders to seek recovery of their own costs in appropriate cases.

This does not mean that every challenge will succeed or that a dispute will carry no risk.

A service charge does not become unreasonable simply because it is expensive. Major repairs, insurance and safety work can legitimately cost substantial sums.

The relevant questions may include:

• Was the work reasonably required?
• Was the cost reasonably incurred?
• Was the work completed to a reasonable standard?
• Does the lease allow the cost to be recovered?
• Was the correct consultation process followed?
• Were appropriate quotations obtained?
• Has the expenditure been properly documented?
• Were leaseholders given the required information?

The reforms should make it easier for residents to ask these questions without facing the same fear of an automatic legal-cost penalty.

Anyone considering formal legal proceedings should still obtain specialist advice based on their own lease and circumstances.

What do the reforms mean for managing agents and freeholders?

The changes are not only relevant to leaseholders.

Freeholders, resident management companies, Right to Manage companies and managing agents will need to review how they prepare budgets, issue demands, retain records and communicate with residents.

Professional organisations may already provide much of the information expected under the reforms.

Others may need to improve their procedures significantly.

Managing agents should consider reviewing:

• Service-charge demand formats
• Budget explanations
• Year-end accounts
• Contractor procurement
• Insurance documentation
• Building-condition reports
• Maintenance schedules
• Reserve-fund projections
• Complaint-handling procedures
• Resident communication
• Document retention
• Access to historic records

Richard Gedall and the My Estate Luton team work with leaseholders, RTM directors, freeholders and block owners who need clearer systems for inspections, budgeting, contractor management, financial reporting and resident communication.

Richard leads the business, but he is the first to recognise that the service depends on the commitment of the staff supporting him.

Our property managers coordinate repairs and contractors. Our inspectors provide evidence from the buildings. Our administrators keep communication moving and records organised. Our finance staff monitor payments, expenditure and accounting information. Our sales and lettings colleagues also contribute local property knowledge and help clients understand the wider value and marketability of their assets.

Every member of the team has a part to play.

Good management is rarely visible when everything is running smoothly, but that does not mean the work is not taking place. It often involves repeated calls, inspections, quotation requests, document checks, reminders and follow-ups before a problem is resolved.

Does Right to Manage remain important?

Yes.

Better information and stronger protection may improve the existing leasehold system, but they do not automatically give leaseholders control over who manages their building.

The Right to Manage process allows qualifying leaseholders to acquire specified management responsibilities through an RTM company without having to prove fault by the freeholder or existing managing agent.

Once the right has been acquired, the RTM company can usually decide how the building is managed and which professional agent should be appointed.

The reforms may help leaseholders make a more informed decision about whether RTM is suitable by giving them better access to:

• Building-condition information
• Historic service-charge records
• Reserve-fund balances
• Existing contracts
• Insurance arrangements
• Current management costs
• Expected major works

However, Right to Manage should not be treated simply as a way of reducing service charges.

Taking control also means accepting responsibility.

An RTM company must ensure that the building is properly managed, the leases are followed, service-charge money is controlled, residents are consulted where required and legal and safety obligations are met.

In Richard Gedall’s experience, the most effective RTM companies combine leaseholder control with experienced professional support.

My Estate Luton helps RTM directors understand their responsibilities, create practical management systems and plan for the long-term needs of their building. Richard is supported in this work by a team that handles much of the detailed administration, inspection work, communication and financial organisation needed to keep a block running properly.

The move towards commonhold

The Government’s leasehold programme is also part of a wider intention to make commonhold the standard ownership model for new flats and make it easier for suitable existing buildings to convert.

Under commonhold, homeowners own their individual units outright while sharing responsibility for the common parts through a commonhold association.

Unlike leasehold, the ownership does not reduce as the remaining lease term becomes shorter.

The transition will not happen immediately.

Millions of existing leasehold homes will remain for many years, and moving an existing development to commonhold may involve legal, financial and practical challenges.

For current leaseholders, the immediate priority remains making sure that their buildings are safe, properly funded, transparently managed and maintained for the long term.

What should leaseholders do now?

Leaseholders do not need to wait for every part of the reforms to come into force before taking an interest in their building.

They can already request and review:

• The current service-charge budget
• Previous annual accounts
• Reserve-fund information
• The buildings-insurance schedule
• Planned major works
• Fire-risk and safety assessments
• Maintenance reports
• Section 20 consultation documents
• Relevant contracts
• The terms of their lease

Residents should raise questions in writing and retain copies of correspondence and supporting documents.

They may also consider:

• Speaking with other leaseholders
• Attending residents’ meetings
• Forming a recognised tenants’ association
• Investigating Right to Manage
• Applying for the appointment of a manager
• Challenging specific charges through the appropriate route

The correct option will depend on the circumstances of the building and the nature of the problem.

What should buyers check before purchasing a leasehold flat?

Anyone buying a leasehold flat should complete careful due diligence.

Questions should include:

1. How many years remain on the lease?
2. What is the current service charge?
3. How has the charge changed in recent years?
4. Is there an adequate reserve fund?
5. Are any major works planned?
6. Are there unresolved safety or maintenance issues?
7. What does the buildings-insurance policy cover?
8. Are there significant arrears within the block?
9. Who controls the management of the building?
10. Are there restrictions on letting, alterations, pets or business use?
11. Are there active disputes involving the freeholder or managing agent?
12. Have recent building reports identified costly defects?

The proposed reforms should improve access to some of this information, but buyers and their solicitors will still need to examine it carefully.

Transparency is only the beginning

The Government’s announcement is an important step for leaseholders.

Clearer service-charge information, better access to historic records, improved insurance transparency and fairer legal-cost rules should help address some of the long-standing imbalance within the leasehold system.

However, transparency alone will not repair a leaking roof, inspect a fire door, arrange an emergency contractor or build an adequate reserve fund.

Good block management still requires:

• Regular inspections
• Financial controls
• Competitive procurement
• Long-term maintenance planning
• Compliance management
• Accurate record keeping
• Consistent communication
• Accountability for decisions
• A team prepared to follow matters through

At My Estate Luton, Richard Gedall works with leaseholders, freeholders, resident management companies and RTM companies seeking a more proactive, transparent and responsible approach to block management.

With more than 20 years of property-industry experience, Richard provides leadership and practical guidance, but he does not do it alone.

He is supported by a dedicated team whose hard work is central to everything My Estate delivers. From the inspectors visiting buildings and the property managers organising repairs, to the administrators maintaining communication and the finance team monitoring expenditure, each member of staff contributes to protecting the properties and people placed in our care.

Their work is not always seen publicly, but it is valued enormously.

For Richard, building My Estate’s authority is not about promoting one individual. It is about demonstrating what can be achieved when experienced leadership is supported by committed people who take pride in doing the job properly.

To speak with Richard Gedall and the My Estate Luton team about block management, service charges or Right to Manage, call 01582 380330 or email luton@my-estate.co.uk.

This article provides general information and does not constitute legal advice. Leaseholders, freeholders and property owners should obtain specialist advice relating to their individual lease, building and circumstances.