Consultation launched on permitted insurance fees for landlords, freeholders and property managing agents

The UK and Welsh governments opened a consultation on 2 December 2024 on proposals to prevent freeholders, property managing agents and landlords from imposing on leaseholders opaque and excessive charges related to building insurance, often in the form of commissions¹. The consultation ran from 9am on 2 December 2024 to 11:59pm on 24 February 2025 and applies to England and Wales¹. A government response to the consultation and a summary of responses were added on 11 July 2025¹.

Under the proposals, landlords, freeholders and property managing agents would only be able to charge leaseholders a fair and transparent permitted insurance fee, with secondary legislation to set out what is permitted¹. The government says the Leasehold and Freehold Reform Act 2024 created powers to address longstanding concerns that some leaseholders are being charged for the arranging and managing of buildings insurance through opaque remuneration methods, not justified on the basis of work contributed¹.

Currently, landlords, freeholders and property managing agents are most commonly paid for arranging and managing building insurance through an insurance broker sharing a proportion of their commission¹. The Act instead allows for a new permitted insurance fee that they would charge leaseholders separately from the insurance premium¹.

The consultation sought feedback on current remuneration practices, the proposed policy, design questions, and implementation considerations¹. The government says the results will help ensure leaseholders are charged fair and transparent costs for managing and arranging buildings insurance¹. The consultation was also published in Welsh¹.

Why it matters for households

The proposals concern leaseholder charges in multi-occupancy buildings in England and Wales, where the cost of arranging and managing buildings insurance is currently often recovered from leaseholders through a commission shared with an insurance broker¹. Under the proposed model, that arrangement would be replaced by a permitted insurance fee charged separately from the premium, with the detail of what payments are allowed to be set in secondary legislation¹. The government's stated aim is that leaseholders are charged fair and transparent costs for managing and arranging buildings insurance¹. The consultation document does not set out the level of any fee, and no figure has been reported¹.

What happens next

The consultation has concluded¹. A government response to the consultation and a summary of responses were published on 11 July 2025¹. The government has said secondary legislation will set out what is permitted¹. No date for that legislation has been reported¹.