The prospect of regulation in the residential property management sector
One of the big news pieces coming out of the party conference season has been the commitment from government (which will some will say is long overdue) to legislate to ensure the regulation of ‘property agents.’ This will include estate agents, property managers, letting agents and other property professionals.
Angela Rayner, the Housing Secretary made this announcement at the Labour Party Conference on 29th September 2026.
This was confirmed in a MHCLG press release published on 29th September 2026. https://www.gov.uk/government/news/government-goes-further-to-protect-leaseholders
For those familiar with this sector, this will come as no surprise. Back in 2019 we had the publication of the report prepared by Lord Best and the Regulation of Property Agents working group recommending the regulation of managing agents. Indeed, I was on BBC Breakfast in 2019 commenting on this.
So why has this taken so long? That is a good question and one that only our politicians can answer. When we look at the current ‘ills’ surrounding leasehold property and the continuing negative press commentary around all things leasehold, it is things like service charges that are key drivers of the desire for reform. It seems relatively obvious to me that those charged with managing millions of pounds of other people’s money and setting service charge budgets should be properly qualified and regulated. Currently, although service charges are held on statutory trust there are no provisions that require any property manager to have any qualifications at all.
So, on one level this is ‘long overdue.’
The position of industry
Whilst there is no compulsion currently for a property management business to belong to a regulatory or trade body, there have been calls from within the industry for regulation and the encouragement of best practice for some time.
The Property Institute (‘the TPI’) (formed by the 2022 merger of the Association of Residential Managing Agents and the Institute of Residential Property Management) has long supported the regulation of managing agents and has in place a voluntary programme of training and standards. The predecessor bodies to the TPI had championed best practice since their inception with ARMA being established in 1991 and the IRPM in 2002. The TPI has welcomed this announcement.
At this stage it is not entirely clear how the regulatory scheme will work, although I do know following a panel session that I chaired at last week’s ALEP Conference that Andrew Bulmer the CEO of the TPI favours a single umbrella regulator, with the functions of each of the different facets of property agency having a separate regulatory body. The TPI being of course a likely best candidate in the residential property management space and this model is something that would look to be the likely best approach.
What will this look like in practice?
Under the proposals, agents would need a licence to practice and would have to hold relevant qualifications. An independent regulator would set professional standards and codes of practice covering conduct and complaints handling and would have the power to revoke licences from agents who fall short.
How all of this will work remains to be seen and the first step will be a consultation on how best to achieve this. We can perhaps expect this in the new year.
Other announcements in the property space
Announced at the same time, the government said it will give the Secretary of State powers to cap permission and administration fees charged to leaseholders and to homeowners on privately managed estates. This is likely to be by way of an amendment to the forthcoming Commonhold and Leasehold Reform Bill.
Estate charges will be brought into the scope of the tribunal by the provisions of the Leasehold and Freehold Reform Act 2024, and this step goes further allowing regulation of the level of fees that can be charged for permissions etc.
The regulator
The government has not said how the new regulatory will be restructured or funded and how it will actively police the industry. If the licence route is adopted, as suggested by the government, it will likely have very real teeth – losing a licence would effectively mean losing the right to trade.
How the regulatory is funded will be critical. It will need the cash and resource to investigate and act if it is to bring fundamental change.
What will the impact be for homeowners?
Better regulation and control ought to mean better service provision and planning and steps being taken to control the long-term costs that those living in shared physical structures can face. One other short-term consequence is likely to be a potential increase in the costs that managing agent business will face, as there will be an increased regulatory burden. Many of those that subscribe to the current voluntary codes will already be absorbing these costs, but in the short term there may be an increase in costs to the consumer as better quality management may cost more.
What about the impact on commonhold?
The draft Commonhold and Leasehold Reform Bill mandates the accumulation of reserve funds and allows for professional directors to be appointed if there are no suitable directors in the commonhold association. Professional managers are likely to have a bigger role to play in self-managed structures as beyond the simplest level, property management is a technical and sophisticated business.
One thing that several commentators have called for would be a similar mandate to be applied to leasehold structures so that mangers would have the power to accumulate funds against longer term expenditure. It would certainly make sense to have a joined-up approach in the property management space and for all those involved both property owners (as end users) and managers to see property for what it is, a long-term asset and to build appropriately for its proper maintenance and repair over what can be relatively long time periods.
The regulation of property managers is likely to be one step in the right direction towards a more informed discussion about the proper management of what can be complex and multi-use property assets.
Mark Chick is the Joint Head of the Bishop & Sewell expert Landlord & Tenant team.
If you have a query concerning leasehold property, then please contact the experts at Bishop & Sewell’s Landlord & Tenant team:
t) 020 7631 4141.
The above is accurate as at 20 October 2026.
The information above may be subject to change. The content of this note should not be considered legal advice, and each matter should be considered on a case-by-case basis.
