Andy Burnham confirms major rule change for over 3 million homeowners | Personal Finance | Finance
Major rule change for over 3 million homeowners from April 2027 (Image: Getty)
More than three million leasehold homeowners will soon gain stronger rights to challenge spiralling service charges. The changes are due to take effect from April 1, 2027, and will give leaseholders new legal entitlements to request more information about what theyโre paying for. The move aims to give people a clearer picture of how their building is managed, maintained, repaired and insured.
The new rules will allow leaseholders to ask for information from previous years, and landlords will need a good reason to refuse to provide it.
From the same date, leaseholders will also get stronger protection from having to pay their landlordโs legal costs when they challenge a charge, ending the deterrent of landlords charging leaseholders whether they win or lose.
Landlords will need court or tribunal approval to pass on any legal costs to leaseholders, and leaseholders will gain the new right to claw back their own legal expenses.
Prime Minister Andy Burnham said: โIt is simply wrong that millions of leaseholders can be hit with unfair charges, then face another bill just for challenging them. That isnโt right, and where we can act quickly to change it, we will.
โTodayโs changes are only the beginning. Weโre giving leaseholders stronger rights now, while we press ahead with the bigger reforms needed to put power back in homeownersโ hands and end the feudal leasehold system for good.โ
Millions of flat owners will be granted new rights (Image: Getty)
Housing Minister Matthew Pennycook MP said: โRapidly escalating and frequently opaque service charges are placing huge financial strain on hard-pressed leaseholders across the country. Today, weโre acting to protect them by introducing regulations that will improve the fairness and transparency of service charges so that unreasonable increases can be more easily challenged.
โAs we work to dismantle the feudal leasehold system in this Parliament, we wonโt leave existing leaseholders behind.โ
Rules will strengthen from November 1, 2027, with leaseholders set to receive clearer information automatically about the charges they are being asked to pay โ whether their building is owned by a private landlord, council, or housing association.
This includes detailed information about the building insurance they help pay for, along with stronger protections against excessive or unreasonable fees for arranging and managing that insurance. Leaseholders will also receive clearly set-out information on the admin fees they could face.
Private landlords will also face new requirements, such as using simpler, standardised service charge demand forms and providing financial accounts and annual reports to provide leaseholders with clearer information about what they are being charged and how their money is being spent.
From November 1, 2028, councils and housing associations will start needing to provide their leaseholders with the new standardised service charge demand forms, financial accounts and annual reports.
These changes will introduce key protections under the Leasehold and Freehold Reform Act 2024.
Further reforms are also planned through the Commonhold and Leasehold Reform Bill, which is due to be introduced in Parliament before Christmas 2026.
The Bill will include the already announced plans to cap existing ground rents at ยฃ250 a year, make it easier for existing leaseholders to move to commonhold, and make the revised commonhold model the default for most new flats.
Commonhold means owning the freehold of your flat and having a greater say, alongside other owners, over how your building is run.
Chief Executive of the Leasehold Advisory Service, Kion Ahadi, said: “Service charges are the most common issue leaseholders contact us about. We welcome these changes as an important step forward in helping people understand what they are paying for and challenge costs they believe are unfair.
โLeaseholders need clear information about how their money is being spent and a fair opportunity to raise concerns.
โBetter access to that information and stronger protection from landlordsโ legal bills will give them more confidence to hold their landlord to account.”
