Housing minister Matthew Pennycook has launched a scathing attack on the UK's leasehold system, singling out major property manager FirstPort for its "unacceptable" conduct. His criticism follows a landmark £1.5 million fine against the company and exposes what he describes as a sector operating like the "Wild West".
Minister Condemns 'Unacceptable' Practices
In a strongly worded statement, Labour's Matthew Pennycook did not hold back in his assessment of FirstPort's operations. He pointed directly to the company's recent penalty from the Financial Conduct Authority (FCA) as clear evidence of systemic problems. The FCA fined FirstPort for serious failures in its treatment of leaseholders, particularly concerning insurance commissions.
The minister accused the firm of imposing "unjustified and excessive" charges on homeowners, practices he argues are emblematic of a broken leasehold model. His intervention adds significant political weight to a long-running campaign by residents and leasehold reform activists who feel exploited by managing agents.
The FirstPort Fine and Soaring Fees
The core of the controversy stems from two key issues. Firstly, the FCA's £1.5 million fine revealed that FirstPort had not properly disclosed commission arrangements on building insurance policies between 2015 and 2022. This lack of transparency meant leaseholders were kept in the dark about financial arrangements made on their behalf.
Secondly, and perhaps more acutely felt by residents, are the dramatic increases in annual service charges. Homeowners in some FirstPort-managed developments have reported fee hikes of up to 40% in a single year. These charges cover services like maintenance, cleaning, and repairs of communal areas, but many leaseholders argue the rises are disproportionate and the justification opaque.
For countless families, these escalating costs represent a severe financial burden, trapping them in homes that become increasingly unaffordable to live in due to fees they have little control over.
Broader Implications and the Push for Reform
Pennycook's condemnation is not viewed in isolation. It signals the government's intent to follow through on its promises of major leasehold reform. The current system, largely unchanged for centuries, has been widely criticised for creating a power imbalance where freeholders and managing agents hold most of the cards.
The minister's characterisation of the sector as a "Wild West" underscores a belief that regulation has been too weak and enforcement lacking. Campaigners hope this high-profile criticism will accelerate legislative action, potentially including caps on ground rents, easier rights to challenge fees, and a simpler path for leaseholders to take over the management of their own buildings.
The spotlight on FirstPort, one of the UK's largest residential property managers, suggests that the scrutiny will extend across the industry. The company's practices are seen by ministers and activists as a test case for the urgent need to overhaul property management and protect homeowners from unfair financial practices.
The coming months are likely to see increased pressure for concrete proposals from the government, as the call to end what many see as an archaic and exploitative system grows ever louder.
