Leasehold: Service Charges
The question
To ask the Secretary of State for Housing, Communities and Local Government, what recent assessment he has made of the affordability of service charges for leaseholders; and if he will take steps to limit their rate of increase.
Answered by Matthew Pennycook
The government recognise the considerable financial strain that rising services charges are placing on leaseholders.
The level of service charge that leaseholders pay depends on many factors, including the terms of a lease and the age and condition of a building.
By law, variable service charges must be reasonable. Should leaseholders wish to contest the reasonableness of their service charges they may make an application to the appropriate tribunal.
The government has no plans to cap service charges for tenants and leaseholders given this would prevent necessary funds being raised for legitimate purposes when necessary.
The Leasehold and Freehold Reform Act 2024 includes measures designed to drive up the transparency of service charges to make them more easily challengeable if leaseholders consider them to be unreasonable. Once commenced, these will ensure all leaseholders receive minimum key financial and non-financial information on a regular basis, including introducing a standardised service charge demand form and an annual report.
The government is committed to acting quickly to implement the provisions of the Act. Further detail can be found in the Written Ministerial Statement made on Thursday 21 November (HCWS244).
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