Published 13th Dec 2025, 11:45 GMT
Leeds-based Watson, which specialises in residential block management, has published a white paper urging the sector to prepare for professional accountability becoming mandatory.
‘UK Leasehold Reforms: Government Steps Up to Strengthen Leaseholder Rights’ details the key actions needed for reform, and how the government has intervened to strengthen leaseholder rights.
In July, Housing Minister Matthew Pennycook launched a consultation into making service charges more transparent and creating a new licensing regime for property managers.
He has called the unregulated leasehold market a “wild west” of operators and is planning to publish a draft bill in the coming weeks that would all but end the leasehold system.
Watson is now urging the wider UK property industry, including developers, Residents’ Management Companies (RMCs), and investors, to prepare for change.
Managing director Ian Omant said: “The UK residential property sector is standing on the threshold of its most significant structural overhaul in decades. Following the Government’s comprehensive announcements throughout 2024 and 2025 regarding leasehold reform, the era of the so-called “feudal” system is coming to a close.”
Ian said that for Watson, these legislative changes are not a disruption, but a long-awaited validation of its business model.
“For years, the leasehold sector has been plagued by systemic issues that have disadvantaged millions of homeowners,” he said.
“We’re pleased to see that the government’s critique has been blunt: the system is outdated, and the property management sector suffers from a lack of regulation.”
He added that housing ministers have identified that, until now, anyone could establish themselves as a managing agent without formal training or oversight. This regulatory gap has allowed rogue agents to levy opaque service charges, neglect maintenance, and trap leaseholders in cycles of escalating costs.
Ian said: “At Watson, we recognise that the newly announced reforms tackle these injustices head-on. The key measures include four key elements.
“The first of these is standardised service charges, which will require detailed, clear breakdowns of costs to prevent hidden fees.
“Second, the shift to commonhold will mean the abolition of leasehold for new flats, reinvigorating commonhold as the default tenure. This will give owners true control over their buildings.
“Also, the regulation of agents will introduce mandatory qualifications and a code of practice to stamp out rogue operators.
“Finally,” he added, “there will be a rebalancing of legal costs, preventing landlords from automatically passing their legal fees to leaseholders during disputes.”
Ian said that the best-performing managing agents are already prepared for the future of housing.
“The government’s description of the sector as a ‘wild west’ is accurate for too many, but it is a label we have worked tirelessly to distance ourselves from.”
Ian said that perhaps the most transformative element of the reforms is the shift in power.
The government is making it easier for leaseholders to claim the Right to Manage (RTM), purchase their freehold, or convert to commonhold. Crucially, the reforms will also grant leaseholders the power to veto and replace underperforming managing agents.
This specific change presents a significant risk to complacent agencies but an opportunity for client-focused firms.
“The ability for leaseholders to easily replace their managing agent is a major change for the industry,” said Ian. “It introduces genuine market competition based on quality of service.”
As the UK moves toward a commonhold-preferred future, he said that developers must also pivot. The sale of new leasehold flats will eventually cease, replaced by structures where residents own the freehold collectively.
Ian said that for existing RMC directors currently navigating the complexities of the Building Safety Act and the new leasehold reforms, the need for a qualified partner has never been greater.
He added that the days of the ‘amateur’ agent are numbered and that compliance regarding fire safety, insurance commissions, and client money protection require the professional rigour of regulated firms.
“The reforms are broad and complex, and our white paper has been produced to help owners and RMC directors understand the scale of positive legislative changes that are imminent,” he said.