The consultation will feed into secondary legislation that will be added to the Leasehold and Freehold Reform Act 2024, which standardised charges the five million leaseholders in England and Wales.

The department adds it is also committed to publishing a draft Leasehold and Commonhold Reform Bill “later this year,” which aims to “reinvigorate” the commonhold system and “will also include a range of other vital reforms to the leasehold system”. 

Minister for housing and planning Matthew Pennycook says the lives of leaseholders are “marked by an intermittent, if not constant, struggle with punitive and escalating ground rents; unjustified permissions and administration fees; unreasonable or extortionate charges; and onerous conditions imposed with little or no consultation”.   

He adds: “The government is committed to bringing the feudal leasehold system to an end and we are progressing the wider set of reforms necessary to do so.” 

The current consultation will run for 12 weeks until 26 September.  

Key proposals include: 

• Fee transparency – An annual report which sets out the details of what leaseholders are paying for and provides other key information for the year ahead, including advanced notice of planned major works 

• Reforming legal costs – Currently, landlords “often have an advantage” in that many leases will allow them to recover their litigation costs incurred during legal proceedings from leaseholders, regardless of the outcome of the dispute

• Major works – It will seek views on making the use of a reserve fund mandatory for new and existing leases 

• Major works consultation — It will seek views on the financial threshold at which landlords must consult leaseholders and ensure that project costs are made clear  

• Fixed service charges — It will seek views on whether those paying fixed service charges should have further protections, such as giving them the same right to challenge the “reasonableness” of their service charge enjoyed by those who pay variable service charges  

• Managing agents – The department says there is an “overwhelming case” for mandatory professional qualifications for these agents in England. It favours that all individual managing agents and managing agent firms must join a professional body, and must have, or be working towards, a minimum qualification to join the body. 

Lease chairman Martin Boyd says: “The current system favours landlords. Leaseholders face complex and often opaque systems when trying to raise concerns and have little real power to hold managing agents to account. 

“With no direct obligation to those footing the bill, some agents act with impunity. Leaseholders regularly report unacceptable behaviour, ranging from aggressive conduct to outright abuse.  

“Any action that enhances transparency to rebalance power when it comes to addressing concerns and inaction will be welcomed by homeowners.”