Leasehold property managers face calls for tighter regulation

Property managers must be regulated to keep pace with the millions of leasehold properties across England and Wales, a firm has warned.

Rushbrook argues five million leaseholders across England and Wales need greater protection as concerns grow over how properties are managed and fees are charged.

The call comes as the government proposes strengthening leaseholders’ rights by requiring property agents to obtain a licence and a cap on fees.

Rising service charges

According to government data, there are an estimated 4.9 million leasehold dwellings across all tenures, with the vast majority (4.633m) found within the private sector.

Of these, 1.91 million also sit within the private rented sector, equivalent to 39% of all leasehold dwellings, with the vast majority of these being flats, accounting for 82.4% of the total.

The data also reveals the financial responsibility of property managing agents, with the average annual service charge paid by owner-occupier leaseholders reaching £2,169 in 2024-25.

This marked a 26.2% annual increase, whilst over five years, the average annual service charge has increased by 33.4%.

Average annual ground rent paid by owner-occupier leaseholders has also increased, rising from £235 in 2023-24 to £315 in 2024-25, an annual increase of 34.3%.

Charges are fair and transparent

Managing director of Rushbrook, Roma Sharma, said: “Property managers are entrusted with people’s homes and increasingly substantial sums of their money, so it’s only right that professional standards keep pace with that responsibility.

“Rising charges don’t automatically mean leaseholders are being treated unfairly, as costs have risen considerably across the board in recent years, with inflation placing additional pressure on the cost of managing and maintaining properties.

“However, what matters is that these charges are fair, transparent and justifiable, with those responsible for managing properties accountable for the service they provide.

“For reputable operators, greater scrutiny shouldn’t be a concern. With almost two million privately rented homes also sitting within the leasehold sector, raising standards benefits landlords too and reinforces the importance of ensuring their properties are being managed professionally and within the rules.”

Capping fees

The government will launch a consultation to determine which fees should be capped and set the level of each cap.

Rushbrook data shows published administration fee schedules include charges of £50 to £60 for permission to keep a pet, £60 to £150 for consent to make alterations and £100 to £250 for a management or LPE1 sales pack.

Other examples include £80 to £150 for remortgage administration or information, £80 to £100 for a notice of transfer when selling a property, and £120 to £150 for a certificate of compliance.