You Cannot Reform What You Do Not Understand: The Real Cost of Leasehold Management
We have a problem, and it isn’t simply the existence of rogue managing agents. It’s the growing belief that the cost of managing residential buildings can somehow be reduced through regulation alone, without understanding what it actually takes to manage them properly.
At the Labour Party Conference on 29 September 2026, Prime Minister Andy Burnham made a significant commitment to millions of leaseholders across the country. Promising a new Leasehold Reform Bill before Christmas, he declared:
“The days of you being squeezed for every penny are coming to an end.”
It’s a powerful statement. Politically, it’s an attractive one, and for leaseholders frustrated by years of rising costs, poor transparency and sometimes appalling treatment, I completely understand why it would be welcomed. But there’s a problem with statements like this. They create expectations. They suggest that, once reform arrives, the financial pressures associated with owning and maintaining a leasehold property will somehow begin to disappear.
That simply isn’t how residential property management works.
At Levels Property Management, we’re not opposed to reform. Quite the opposite. We believe in professional standards, transparency, accountability and protecting leaseholders from unfair practices. We have absolutely no objection to removing rogue operators from our industry, and we recognise the value of appropriate mandatory qualifications. But we also believe that reform needs to be based on a genuine understanding of the sector it seeks to regulate, because you cannot legislate away the cost of maintaining a building, employing skilled professionals or keeping residents safe.
If the Government gets this wrong, the consequences could extend far beyond managing agents.
What has the Government actually announced?
Let’s start with the facts.
On 29 September 2026, the Prime Minister confirmed the Government’s intention to introduce a Leasehold Reform Bill before Christmas 2026. On the same day, the Ministry of Housing, Communities and Local Government published its announcement, Government goes further to protect leaseholders, outlining additional proposals intended to strengthen protections for leaseholders and homeowners on privately managed estates.
The measures include powers to introduce caps on certain permission fees and administrative charges, alongside a proposed independent regulator for property agents. Under those proposals, property agents would be required to hold licences and appropriate qualifications, with the regulator able to establish professional standards and take action against agents who fail to meet them, potentially including removing their licences. The Government also intends to consult on which fees should be capped and at what levels.
These are significant proposals, and there is much within them that we welcome.
Leaseholders should not face unreasonable fees for routine administrative matters. They should be able to understand what they are paying for and challenge costs that cannot be justified. They should also be able to expect competent, accountable professionals to manage their homes.
Indeed, many reputable managing agents already operate with precisely these principles. But here’s the distinction that seems to be getting lost: protecting leaseholders from unreasonable charges is not the same thing as making the legitimate cost of managing their buildings disappear, and it is that distinction which deserves far more attention.
Managing agents are businesses too
There seems to be an increasingly popular narrative that managing agents are responsible for rising service charges, and that stronger regulation will automatically translate into cheaper bills. That narrative is dangerously simplistic.
A managing agent is a business. It employs people, invests in systems, carries professional responsibilities, maintains insurance, pays suppliers and incurs the same economic pressures as countless other businesses across the country. When inflation rises, our costs rise. When employment costs increase, our costs increase. When software providers raise their prices, our costs increase, and when new legislation introduces additional responsibilities, those responsibilities require time, training, expertise and resources. We cannot simply absorb an unlimited amount of additional expenditure while continuing to deliver the same standard of service.
Nor should responsible businesses be expected to.
That doesn’t mean every fee increase is justified. Far from it. Agents should be able to explain their charges, demonstrate value and manage their own expenditure responsibly. But there has to be an acknowledgement that a fair fee is not necessarily the lowest fee. It is a fee that reflects the work involved and allows that work to be carried out properly. We should be encouraging sustainable, professional management, not creating an environment in which agents are afraid to charge what their services genuinely cost.
The costs nobody can legislate away
One of the most important misunderstandings surrounding service charges is the assumption that the managing agent controls every element of them.
We don’t.
A service charge is generally made up of expenditure incurred in providing services, maintaining the building and meeting the obligations set out in the lease. Depending on the development, that might include cleaning, communal electricity, gardening, insurance, lift maintenance, repairs, professional advice, statutory inspections and contributions towards future major works.
The managing agent may administer the budget, procure services, scrutinise invoices and advise on expenditure – but many of the underlying costs are determined by external markets, professional suppliers and the requirements of the building itself.
Think about the price of materials, the cost of employing a qualified electrician, the fees charged by an accountancy practice to prepare annual service charge accounts. The cost of maintaining a lift, inspecting fire doors or renewing an insurance policy.
Then consider the National Living Wage and wider employment costs. We fully support fair pay. People deserve to earn a decent living for the work they do, but increased wages have a real financial impact on businesses delivering cleaning, grounds maintenance, security and other essential services. Those costs don’t vanish because a politician promises reform. They still have to be paid, and while good procurement, competitive tendering and sensible long-term planning can help control expenditure, there is a limit to what even the most diligent managing agent can achieve.
You cannot negotiate inflation out of existence. You cannot demand professional standards while refusing to recognise the cost of professional services.
Building safety is essential. But it isn’t free.
Nowhere is this contradiction more apparent than in building safety.
Over recent years, the responsibilities associated with managing residential buildings have become increasingly complex, and rightly so. Fire safety, structural safety and the wellbeing of residents must always come first. But consider what that means in practice. Fire risk assessments, health and safety assessments, fire door inspections, remedial works, emergency lighting, fire alarm maintenance, specialist surveys, compliance records and professional advice.
Each carries a cost, and many need to be reviewed, repeated or updated as circumstances change.
For higher-risk buildings in England, the Building Safety Act 2022 introduced further duties concerning the identification and management of building safety risks, safety case reports, resident engagement and the retention of building information. These are serious responsibilities. They require specialist knowledge, reliable information and ongoing management. They cannot be treated as optional extras when preparing budgets.
And let’s not forget that many buildings have inherited years, sometimes decades, of underinvestment. Problems that were overlooked or deferred in the past do not become cheaper to resolve simply because they have remained hidden. In fact, delaying essential works can make matters considerably worse.
So when residents understandably question why their service charges are increasing, the answer is not always poor management. Sometimes the answer is that their building requires more expenditure to remain safe, compliant and properly maintained.
That is not a comfortable conversation to have, but it is an honest one, and honesty is something our industry needs more of, not less.
What about the people actually doing the job?
There’s another part of this conversation that rarely gets the attention it deserves.
Property Managers.
I genuinely believe they are among the most underappreciated professionals working in the property sector. Just consider the range of responsibilities involved. On any given day, a Property Manager might be dealing with a building defect, reviewing a contractor’s quotation, discussing a legal obligation, preparing a financial report, handling a complaint, mediating a disagreement between neighbours and coordinating an emergency repair. They need to understand building construction, health and safety, leases, financial management, contractor procurement, customer service and increasingly complex legislation. They must be organised, commercially aware, empathetic, decisive and capable of remaining professional in difficult circumstances.
Sometimes they are expected to be building experts. Sometimes financial advisers. Sometimes counsellors, conflict resolvers or the person absorbing everyone’s frustration when something goes wrong, all while managing numerous developments and responding to growing expectations for immediate answers, instant updates and rapid solutions. Yet the profession is too often discussed as though it were simply an administrative service.
It isn’t.
Property management is a skilled, demanding and increasingly specialised profession.
We support the principle of mandatory qualifications. Improving knowledge and competence across the sector can only be a positive thing when implemented proportionately and effectively.
But there is an uncomfortable question that follows: If we expect Property Managers to become more qualified, carry greater responsibility and meet increasingly demanding professional standards, are we prepared to recognise their value financially? Because many agencies are already facing pressure on salary budgets.
Employment costs are rising, client budgets are being squeezed and management fees remain under intense scrutiny. The result is a growing disconnect between what we expect of Property Managers and what the industry can afford to pay them.
That should concern everyone.
If we continue to increase the demands placed on good people without investing in them, we risk making the profession less attractive at the very moment we need more skilled professionals entering it. We cannot keep raising the bar while removing the resources needed to reach it.
Technology is no longer a luxury
There was a time when property management could operate with relatively basic systems, spreadsheets, paper records and a collection of email folders. Those days are gone.
Modern managing agents need appropriate systems for financial management, accounting, document retention, communications, compliance monitoring, reporting and day-to-day operational administration. They also need secure hardware, reliable email services, data protection measures, software licences, support and maintenance.
All of this costs money.
In the higher-risk building environment, there are additional legal obligations surrounding building safety information and the digital management of records. Resident engagement strategies must also set out how residents are informed and involved in relevant building safety decisions.
Digital portals can play an important role in supporting these obligations, improving accessibility and giving residents a reliable place to find information. They are not universally mandated as the only method of resident communication, but they are increasingly valuable tools in delivering modern management. Technology is not simply an overhead. Used properly, it improves efficiency, accountability, consistency and the experience of residents and clients.
At Levels, this is something we feel particularly strongly about.
We developed our own client portal, MyLevels, precisely because we wanted greater control over how information is shared, how our clients engage with us and how we deliver our services. Rather than relying entirely on an externally supplied portal, we have invested our own time, expertise and resources into creating technology that reflects how we believe property management should work. It helps us control certain third-party software costs and gives us the flexibility to continually improve the service we provide.
But even our own technology requires investment, hosting, development, maintenance and ongoing support.
Innovation can create efficiencies. It cannot make infrastructure free.
The danger of a race to the bottom
This brings me to one of my greatest concerns about the direction in which our industry is heading.
The race to the bottom.
We are already operating in a market where some agents compete aggressively on management fees, sometimes offering prices that raise legitimate questions about how an adequate service can be delivered sustainably.
Of course, competition is healthy. It encourages businesses to improve, innovate and provide value. However, there is a difference between efficient pricing and unsustainable pricing. If an agency wins business by offering an unrealistically low management fee, something eventually has to give. Perhaps the Property Manager is allocated too many buildings, perhaps investment in technology or staff training is reduced. Perhaps communication deteriorates, preventative maintenance is overlooked or issues take longer to resolve. Or perhaps the initially attractive fee is supplemented by additional charges that were not properly understood at the outset.
None of this benefits leaseholders.
And there’s another consequence we should be discussing.
What happens to smaller, independent managing agents if rising regulatory and operational costs make it increasingly difficult for them to remain viable? Do we really want an industry dominated by a handful of large corporate operators? That would potentially reduce choice, weaken competition and make it harder for clients to find the personal, relationship-led service that many independent agencies are exceptionally good at providing.
This is not an argument against larger agents, there are excellent businesses of every size. It is an argument for maintaining a diverse, competitive and sustainable sector. The Government should be creating an environment in which good businesses can thrive, not one in which scale becomes the only reliable means of survival.
We should also be particularly careful about reforms that impose additional costs on compliant agents without distinguishing sufficiently between those already doing the right thing and those who are not.
What we’re doing differently at Levels
I think it’s important that we hold ourselves to the same standards we expect of others.
At Levels Property Management, transparency isn’t something we believe should only exist because legislation requires it. It is fundamental to how we operate.
We are clear about our professional management fees. We do not believe in adding arbitrary administration charges simply because an opportunity to raise an invoice presents itself. We believe clients should understand what they are paying for, why expenditure is necessary and how decisions are reached, and we work hard to keep costs proportionate without compromising the standard of service we provide. In fact, our core professional management fees, expressed per leaseholder across the developments we manage, are significantly less than the cost of a cup of coffee per day.
Significantly less.
Consider that for a moment.
For that relatively modest daily equivalent, we are expected to provide access to qualified and experienced professionals, coordinate maintenance, manage relationships, support compliance, oversee contractors, administer building finances and deal with an enormous variety of issues as they arise – and that is before considering the additional responsibilities that can arise at particularly complex developments.
We are not suggesting that every cost is justified simply because it has been incurred. We challenge expenditure, consider alternatives and look for ways to improve efficiency. But we refuse to accept that good management should be measured solely by how cheaply it can be provided.
Our approach is built around our three core values: Integrity, Information and Innovation.
Integrity means being honest about costs and giving clients the advice they need, even when it isn’t necessarily what they want to hear.
Information means ensuring they understand the responsibilities, financial realities and decisions affecting their buildings.
Innovation means continually examining how we can use better systems, processes and technology to improve service while controlling expenditure.
Those principles are not incompatible with reform. They are precisely the principles that meaningful reform should encourage.
Leaseholders deserve honesty, not unrealistic expectations
I want to be clear about something.
There are leaseholders across the country who have experienced unacceptable treatment. There are agents who have failed to communicate, failed to account properly for expenditure, imposed unreasonable fees or delivered services that fall far short of what clients should reasonably expect. Those experiences should not be dismissed or minimised.
Where poor practices exist, they need to be challenged. Where wrongdoing occurs, appropriate consequences should follow. But we must stop treating every rise in service charges as evidence of exploitation. We must also stop treating every managing agent as though they are part of the problem.
Many agencies are working extraordinarily hard behind the scenes, responding to emergencies, navigating complicated legislation, supporting volunteer directors, addressing historic building defects and helping residents through difficult circumstances. Much of that work goes unseen, and when things run smoothly, it is often taken for granted.
The difficulty with broad political statements is that they can create the impression that a problem has one simple cause and therefore one simple solution.
It doesn’t.
A leaseholder paying more this year than last year may be facing increased insurance costs, essential fire safety expenditure, a major repair, greater utility costs or the consequences of previously inadequate reserve fund contributions. None of those necessarily indicates that a managing agent is profiting unfairly.
We need better public understanding of how residential buildings are funded, what a managing agent is responsible for and what service charges actually represent.
And frankly, that education needs to extend to policymakers too.
Our challenge to the Government
We welcome the ambition to improve standards and protect leaseholders.
We support proper accountability, fair charging, competent professionals and meaningful consequences for those who repeatedly fail their clients.
But we challenge the Government to go further than attractive conference statements.
If you want better property management, you must understand the cost of delivering it.
That means recognising the financial pressures on legitimate managing agents.
It means distinguishing management fees from wider service charge expenditure.
It means acknowledging the cost of statutory compliance, building safety, professional staffing and essential technology.
It means consulting meaningfully with independent agents as well as larger operators, industry bodies, leaseholders and other stakeholders before introducing new requirements.
And it means ensuring that regulation is proportionate, workable and focused on delivering genuine improvements rather than simply creating another layer of cost.
There also needs to be a much stronger focus on education.
Leaseholders deserve clear information about their rights, responsibilities, budgets and the practical realities of maintaining their buildings.
Ministers and policymakers need a detailed understanding of the operational responsibilities they are regulating.
And managing agents need to continue improving transparency and demonstrating the value they provide.
Those are shared responsibilities.
Reform must raise standards, not lower expectations
The Prime Minister’s promise that leaseholders will no longer be squeezed for every penny will understandably resonate with many people. It must not, however, become a suggestion that properly maintained buildings can somehow operate without properly funded services, because if managing agents are pushed into charging unsustainable fees, if experienced Property Managers leave the profession, if investment in systems and infrastructure is reduced, and if smaller independent businesses are driven out of the market, who exactly benefits?
Certainly not the leaseholders who rely on those services.
We should want better-qualified professionals. Better-managed buildings. More transparent expenditure. More effective regulation. Greater accountability.
But all of those things require investment. You cannot demand higher standards while expecting the cost of delivering them to disappear.
At Levels, we will continue doing what we believe is right: providing transparent, professional management, investing in our people, developing better technology and putting our clients’ interests first.
We welcome reform that helps us and other responsible agents do that more effectively.
What we cannot welcome is a narrative that implies the overwhelming challenge in residential property management is simply that managing agents charge too much. That narrative misunderstands the work, undervalues the people doing it and risks damaging the very standards we should be trying to improve.
So here is our message to the Government.
Regulate the rogue agents. Raise professional standards. Protect leaseholders from exploitation. Absolutely. But stop promising a cheaper tomorrow without acknowledging the genuine cost of delivering a safer, better-managed today.
The legitimate managing agents working hard to get this right are not the enemy. We should be part of the solution, and we deserve to be heard.
Level With Us is our ongoing series exploring the realities, challenges and opportunities within residential property management. We believe that informed conversations, constructive challenge and greater understanding are essential to moving our industry forward.
Official sources and publication notes
Prime Minister Andy Burnham’s Labour Party Conference speech — 29 September 2026. Confirms the proposed pre-Christmas Bill and his statement about leaseholders being squeezed financially. The Labour Party.
Government goes further to protect leaseholders — 29 September 2026. Confirms proposed regulation, licensing, qualifications and administrative fee controls. GOV.UK.
Stronger leasehold protections in crackdown on hidden fees — 15 July 2026. Particularly relevant because the Government expects separate service charge transparency measures to commence as soon as possible from 2027, including annual reports, revised demands and access to building information. This is distinct from the Prime Minister’s Christmas deadline for introducing a Bill. GOV.UK.
Keeping information about a higher-risk building: the golden thread — official guidance on digital building safety records. GOV.UK.
Preparing a resident engagement strategy — official Building Safety Regulator guidance. GOV.UK.
