Citizens Advice response to MHCLG’s Strengthening leaseholder protections over charges and services consultation

Strengthening leaseholder protections over charges and services Consultation response 620 KB

Citizens Advice welcomes the opportunity to respond to MHCLG’s consultation on strengthening protections for leaseholders and social tenants over service charges. Our response focuses on how these reforms could help heat network consumers.

A third of the estimated 1.1 million heat network consumers pay for their individual supply of heating and hot water as part of rent or service charges. This ‘bundled’ payment system creates significant harm. Because heating debt is classified as housing arrears, tenants can be threatened with eviction, and potentially evicted, if they fall behind on payments. Leaseholders can be threatened with forfeiture of lease for heating debt for the same reason. Furthermore, people with bundled heating payments won’t benefit from major new billing and price protections Ofgem is introducing from January 2026. As Ofgem plans to phase in more protections from 2027 onwards, the protection gap could widen substantially over time (see 1 below). 

To address this unfairness, Citizens Advice urges MHCLG to work with the Department for Energy Security and Net Zero (DESNZ) to unbundle heating and housing charges. DESNZ believes this is ‘fundamental to navigating the new regulatory regime’ for heat networks (see 2 below). We recognise this is a complex legislative challenge and it will take time to achieve, but the government shouldn’t allow legal complexity to result in unfair outcomes for consumers. 

In the meantime, MHCLG’s proposals in this consultation represent a vital opportunity to address some of the significant harms facing that Ofgem’s incoming regulatory system won’t address -  if MHCLG can effectively tailor the proposals to meet the needs of heat network consumers. 

1. DESNZ/Ofgem, Heat networks regulation: implementing consumer protections. Government response, 1.2 MB August 2025, pages 87-89; Ofgem, Heat networks regulation: Fair price protections consultation, April 2025, page 33.

2. Inside Housing, How can social landlords ensure their heat networks are fit for the future? 2025.