Consultation closed on permitted insurance fees

The Ministry of Housing, Communities and Local Government consultation on introducing permitted insurance fees for landlords, freeholders and property managing agents closed at 11:59pm on 24 February 2025¹. It ran from 9am on 2 December 2024 and applied to England and Wales¹. A government response to the consultation and a summary of responses were added on 11 July 2025¹.

The consultation set out 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. Instead, they would only be able to charge a fair and transparent permitted insurance fee to leaseholders, with secondary legislation to set out what is permitted¹.

The Leasehold and Freehold Reform Act 2024 brought in a range of measures to give more powers and protections for homeowners and leaseholders¹. As part of this, the Act created powers to address longstanding concerns that some leaseholders are being charged for the arranging and managing of buildings insurance by their landlords, freeholders or property managing agents 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 allows for a new permitted insurance fee that landlords, freeholders and property managing agents would charge leaseholders, separately from the insurance premium¹. The consultation document states:

The consultation sought feedback on current remuneration practices, the proposed policy, design questions, and implementation considerations¹. Between December 2024 and February 2025, the UK and Welsh governments consulted on measures to address concerns that some leaseholders in multi-occupancy buildings are being overcharged for buildings insurance¹. The consultation was also published in Welsh¹.

Why it matters for households

The proposals concern leaseholders in multi-occupancy buildings in England and Wales who pay for buildings insurance through their landlord, freeholder or property managing agent¹. Under current arrangements, those parties are most commonly paid through an insurance broker sharing a proportion of their commission, a cost that sits within what leaseholders pay¹. The proposed permitted insurance fee would be charged separately from the insurance premium and would be limited to what secondary legislation sets out as permitted¹. The consultation outcome states that the results will help ensure leaseholders are charged fair and transparent costs for managing and arranging buildings insurance¹. No figure for the permitted fee, and no date for when it would take effect, has been reported¹.

What happens next

Secondary legislation will set out what is permitted under the new fee¹. The government response to the consultation and summary of responses were published on 11 July 2025¹. No date for laying the secondary legislation has been reported¹.