Leaseholder Reforms: Why the Government’s Transparency Plans May Miss the Bigger Picture
As part of ongoing leaseholder reforms, the Government has launched a new consultation, Strengthening Leaseholder Protections over Charges and Services, which closes on 26th September 2025. The proposals are positioned as a way to make service charges clearer, improve access to information, and help leaseholders feel more confident that their money is being properly managed.
On the surface, this sounds like a step in the right direction. Leaseholders across the country have long asked for more transparency, and the consultation sets out measures intended to deliver just that.
But are these reforms really addressing the underlying issues? At POD Management, we believe they risk missing the bigger picture. While the Government is focused on paperwork and process, the actual challenges of service charge costs, scalability, and the realities of managing complex buildings are being overlooked. We spoke to our CEO, David Goldberg, on this.
What the Government Proposes
The latest reform consultation focuses on tightening rules around the way service charges are presented and explained. The aim is to standardise formats, require clearer breakdowns of costs, and make it easier for leaseholders to challenge spending decisions if they believe charges are unreasonable.
For leaseholders in smaller or less complex blocks - particularly those who currently receive limited or inconsistent information - these changes could bring genuine benefits. Standardisation can create a baseline of understanding and ensure all leaseholders are provided with the same level of detail.
However, for larger and more complex developments, the benefits are less obvious. Here, the proposals risk introducing unnecessary complexity without solving the deeper concerns around cost transparency and decision-making.
Where the Reforms Fall Short
Our CEO, David Goldberg, explains:
“There are some really good proposals that will benefit leaseholders, which I actively support. However, the method of delivery is like taking a huge step back in time. There is the potential to create reams and reams of paper, presenting information in formats I first saw 20+ years ago, and no checking of the third-party software systems that we all use to see if they can actually deliver it in a way that is scalable.”
The reforms may look modern on paper (excuse the pun) but are being rolled out in outdated ways. They fail to reflect the technology that professional managing agents use and depend upon.
But the bigger concern is that the latest reform doesn’t seem to touch the real issue: the rising costs of service charges themselves. Leaseholders want to know why their bills are increasing and what’s driving those costs, not just to receive another set of templated paperwork.
The Knock-On Effects
Another unintended outcome could be an increase in costs for leaseholders, not a reduction. David highlights:
“Introducing regulation and professionalising the industry will undoubtedly add cost to the consumer. When you consider the aim is to reduce service charges, asking agents to do their job (rightly) to a higher standard will lead to more cost, not less and while this is positive, the potential impact needs to be communicated to leaseholders.”
Managing agents will need to dedicate more staff, more hours, and more systems to maintain compliance. Again, for small blocks, this may be manageable. But for large-scale developments, the administrative overhead could be significant, and those costs will ultimately fall back on leaseholders through higher service charges.
The Government wants to reduce the ‘burden’ of service charges, but the reforms, as they stand, risk doing the opposite without clear signposting on why. For example, mandating reserve funds and Asset Management Plans are a positive outcome, but they will ultimately result in higher annual service charge costs.
Service Charge Transparency in Larger Developments
For most leaseholders, the real frustration lies in not just seeing the numbers but understanding them. Why do service charges increase year after year? What’s driving major works? Are procurement decisions delivering value for money?
In many larger developments, managing agents already provide detailed reports. The challenge isn’t access to information, it’s the perception of fairness and the desire to influence spending decisions.
The problem, however, is that in a building of 200 units, not every leaseholder can have a say on every line item. Achieving consensus on how money should be spent is not only impractical, it’s impossible.
Without addressing these structural realities, leaseholder reforms that focus narrowly on reporting formats risk being cosmetic. They may improve presentation but will not resolve the underlying tensions between cost, transparency, and decision-making in complex developments.
Why Are Service Charges Rising?
Contrary to the false narrative often believed, service charges are not ‘punitive’ tools wielded by freeholders or agents. They are a reflection of real costs. Agents do not profit from higher charges, beyond their agreed management fee, and service charge monies are held in trust for leaseholders’ benefit only.
The real reason service charges are rising are external cost drivers. Among them:
Building Safety Act compliance: essential but expensive, uncovering poor historic build quality.
Cost of living crisis: inflation pushing up materials and contractor rates.
Utilities and insurance costs: sharp rises
Planning changes estate design choices: such as district heating systems and ‘fleecehold’ estates, which shift upkeep costs onto private owners.
Wages inflation: impacting maintenance and service providers.
Professionalisation and compliance: ensuring proper long-term planning, safety checks, and governance that were often ignored in the past.
As David notes:
“Service charges are considered ‘unaffordable’ because the true cost of maintaining and upkeeping a leasehold property is considerably higher than those living in leasehold might expect or feel comfortable paying.”
In short, transparency reforms don’t change the numbers themselves. The underlying costs remain - and in many cases are rising.
“Leaseholders have seen sharp rises because developers and estate agents (in a bid to help them sell and leaseholders themselves - with often unrealistic expectations or taking very short term views) have sought to suppress them and only now, when professionalisation and legislation comes along to rightly improve the situation, are we seeing the impact this has on service charges.”
“Making out that agents or landlords are making them unaffordable in an arbitrary way shows a lack of understanding as to their working mechanism. Unfortunately, no amount of transparency over what costs go into calculating a service charge will change whether it is affordable or not. How they are spent is already open to scrutiny and there are already very workable mechanisms in place to address this.” David adds.
Practical Solutions
In a recent response letter written in regard to the consultation, David contributed a number of practical solutions to potentially help tackle the issues at hand. These included:
Longer-term contracts for managing agents without the need to consult: make it subject to KPIs, and it enables them to invest in systems and drive procurement efficiencies.
Remove VAT on site staff costs: an unintended consequence of HMRC rules that could be revisited to reduce costs to leaseholders.
Modernising payment methods: allowing service charges to be paid by credit card with processing fees passed on, improving flexibility for leaseholders.
Set email as the default correspondence method: sending information by email, rather than post, will help avoid unnecessary paperwork and administration.
Encouraging local authorities to adopt more land: to avoid double-charging homeowners for upkeep via both council tax and service charges.
Improving build quality: better building control and long term planning requirements to ensure buildings and the services installed are fit for long term purpose.
These types of measures target root causes and inefficiencies rather than adding more bureaucracy. In our opinion, it’s also important that robust proposals are put in place to protect managing agents from the likes of vexatious requests, harassment (both as a company and to individuals) and incurring administrative costs without a right of recovery.
Make Leaseholder Reforms Fit for Purpose
At POD Management, we share the Government’s ambition for greater transparency and accountability. But we also understand the practicalities. Our role is to help both leaseholders and freeholders navigate these shifting regulatory requirements without losing sight of what really matters: keeping buildings safe, compliant, and financially sustainable.
The Government’s consultation on strengthening leaseholder protections is an important step. The intention to give leaseholders confidence and improve transparency is right, but in its current form, it risks missing the bigger picture:
The leaseholder reforms focus on reporting formats, not the root causes of rising service charge costs.
They don’t account for scalability in larger, more complex buildings.
They may increase costs for leaseholders by adding layers of bureaucracy and compliance.
As David puts it:
“I’m all in favour of the idea of creating greater transparency for leaseholders and the ideas are definitely a step in the right direction and should be supported, but as managing agents, we must ensure we are given some help to communicate in an effective way. It’s really important we provide a voice on the practicalities of implementation and impact it will have on an already archaic industry. Please respond to the consultation. If we are to help our customers, we must make it fit for purpose.”
The consultation closes on 26th September 2025 and you can respond to the proposal here.
*Opinions in this piece are those of David Goldberg and POD Management.
Get in Touch with POD Management
Whether you’d like to know more about proposed legislation updates, or looking for a trusted managing agent to support your development, our team is always on hand to help. Contact us today:
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