Leasehold Service Charge Reforms: What Owners Need to Know

The government has confirmed a package of leasehold service charge reforms which are expected to begin coming into force from 2027.

The measures form part of the Leasehold and Freehold Reform Act 2024 and are intended to make service charge information clearer and give leaseholders greater access to information about the costs associated with their buildings. The government announced the next stage of implementation on 15 July 2026, alongside two separate consultations on leasehold enfranchisement.

For anyone who owns a leasehold property, it is worth understanding what has been confirmed, what is still being considered and what the changes could mean in practice.

What is changing?

The confirmed reforms focus on making service charge information more transparent.

• One of the main changes will be a new annual report for leaseholders. Landlords will need to provide information about the condition of the building and plans for major works, giving leaseholders a clearer picture of how their building is being managed.
• There will also be a standardised service charge demand form, setting out more detailed information about what leaseholders are being asked to pay and what the charges are intended to cover.
• Leaseholders will also gain enhanced rights to request information about their building. The government has confirmed that certain information, including fire safety information and invoices relating to maintenance work, will be available on request for periods going back up to six years.
• The reforms also include changes to the treatment of legal costs when disputes arise over service charges. The government says the new rules will give leaseholders greater protection from having their landlord’s legal costs passed on to them without challenge.

These measures are intended to come into force as soon as possible from 2027, but the detailed regulations still need to be developed.

What is still being decided?

The July announcement also included two consultations covering the process of extending a lease or buying the freehold.

One consultation looks at how much leaseholders would pay to extend their lease or buy the freehold. The other considers the limited circumstances where a leaseholder may still have to contribute towards their landlord’s costs, as the proposed rules would generally mean each side pays their own costs.

These changes should not be treated as final policy until the consultation process and necessary legislation have been completed.

There is also a wider Commonhold and Leasehold Reform Bill to include proposals to make commonhold more accessible, ban leasehold for most new flats and cap ground rents at £250 a year, eventually reducing to a peppercorn after 40 years. These proposals are not yet law.

What does this mean for leaseholders?

For now, the most important point is that the new service charge measures are not yet in force. Existing leaseholders should continue to follow the terms of their current lease and the rights that already apply to service charges.

However, the direction of travel is towards greater transparency around the costs of owning and maintaining leasehold property.

If you are buying or selling a leasehold home, understanding the service charge, building management arrangements, remaining lease term and other lease-specific costs remains an important part of the transaction. Your conveyancer can advise you on the legal and financial details of the individual lease.

At John German, our teams understand that leasehold properties can involve additional information and considerations for buyers and sellers. Thinking about buying or selling a leasehold property? Get in touch with your local John German team to discuss your plans.