Reforming estate management: Finding the right balance

12 March 2026 saw the submission deadline for responses to two government consultations: one on reducing the prevalence of private estate management arrangements and a second on increased protections for freehold homeowners required to pay service charges. Part of the latter is in anticipation of the implementation of Part 5 of the Leasehold and Freehold Reform Act 2024, still yet to come into force (and no date given for that to happen).

Estate management on new-build residential developments has been the focus of promised reform since the Competition and Markets Authority’s 2024 report into the housebuilding market. The report was critical of what it characterised as systemic, structural failures in the industry: a lack of statutory protections for freehold homeowners on the reasonableness of service charges, consultations as to works undertaken or an ability for meaningful redress. So profound were some negative experiences that some refer to service charge regimes on new developments as “fleecehold estates”.

The consultation sought views on:

• Mandatory adoption of assets/facilities delivered on new developments, that are not otherwise transferred into private home ownership.
• Improving adoption processes – in terms of cost, common standards and speed/streamlining of process.
• Resident control of management companies – including a right to apply for a substitute manager.
• Transparency and reasonableness of maintenance standards and associated charges, to put freehold homeowners on a similar footing to those with leasehold interests paying similar charges.

There are positives to take from the legislation, consultations and conversations that have been prompted as a result. Everyone should welcome reform that reduces the administrative time and cost of delivery and addresses poor practices in private estate management. But there have been success stories too, and it would be a missed opportunity not to understand what underpins that best practice in an effort to replicate it.

There are arguably some crucial aspects missing in some of the proposed approaches for reform:

• The standardisation of adoption requirements – and requiring widespread mandatory adoption – risks jeopardising some high-quality placemaking. It could ignite a race to the lowest common denominator in terms of design for those who already struggle with the viability of delivering new developments. Protection shouldn’t negate innovative creativity for place-led design where that is financially, as well as in some cases more environmentally sustainable for residents.  
• There appears to be some misalignment across various policy requirements. For example, strategic development sites meeting their statutory biodiversity net gain obligations often have significant areas needing specialised maintenance and monitoring, that are not otherwise suitable for adoption. Should these liabilities and responsibilities fall to residents without the necessary experience?
• There needs to be a greater appreciation about how successful sites of strategic scale need to be nurtured. To mandate resident control of management companies at the outset, or enable the dissolution of a stewardship body without any prescription as to what is substituted in lieu, doesn’t reflect the reality that:
  • Fostering genuine community development and participation, with the appropriate expertise, can take many years. 
  • The vast majority sites of scale are subsidised in the early stages of delivery by the developer. It often facilitates early delivery of community infrastructure that is a hallmark of the most successful schemes. But let’s be clear: viability then depends on a long term return on capital. This model for private sector financing (whether exclusively or as part of a public/private partnership) is likely to come under significant challenge, if the value still to be recovered is perceived at risk because it could be materially affected by the actions of resident controlled management companies in how they choose to deal with (or perhaps fail to deal with) integral public realm.

Long term stewardship is a nuanced interaction of process, people and place. While protections are necessary, too uniform or prescriptive a solution may not suit every development (particularly strategic projects with complex assets and liabilities). Although the in-perpetuity legacy has to be a core commitment, those overseeing that vision will likely change as communities mature. Policy should therefore strike a balance between safeguards against poor practice, ensuring residents are adequately protected, and allowing flexibility so that residents assume control only at an appropriate time.

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