Thanks, Mike. This is another important area, isn't it? The costs to leaseholders reflect the shared responsibility for maintaining safer homes and buildings, but only reasonable management-related costs can be passed on to leaseholders through service charges. These are subject to existing statutory protections, so the costs will inevitably vary from building to building, dependent on the risks identified. But the estimated average annual cost per residential unit, again, varies by building type. The highest costs arise, as you would imagine, in category 1 buildings, because obviously they have the most extensive duties.
So, for a category 1 building, the cost is estimated to be £275 per unit per year. This is equivalent to 3 per cent of average annual private rent in Wales. For blocks of flats less than 11m high, the cost is estimated to be £31 per unit per year, or 0.3 per cent of average annual private rent in Wales. But they should not be new costs to individuals, so householders in multi-occupied residential buildings should already be subject to costs attached to ensuring the safety of their buildings.
That said, I just want to be clear that we do recognise the pressures on household budgets and the wider cost of living, and that's why we've built a proportionate approach to ongoing consultation to ensure that the regime is both effective and affordable for residents. We'll continue to engage very closely with leaseholder groups and management agents to ensure that the regime is fair, practical, and delivers real improvements.
I'd also like to say at this point that we are considering whether there's anything further that we can do in supporting residents with costs attached to the new regime. So, for example, by requiring landlords to consider other funding options, such as insurance, before passing on any costs in terms of safety risks to leaseholders. So, I am really keen to hear the committee's views in this space as well.
Also, I think it's important to say that RSLs have told us that they are confident that they're already complying with most of those new duties. As a result, this should not be a significant additional cost for residents in social housing. That was something that I saw and heard when I went to Merthyr Valleys Homes. Again, there's some really good work that's gone on there. That was something they were very clear about, and they've put in some particular measures that were really beneficial to residents. They were made to feel safe in their homes as well, and they were. There are some really good examples where, as I say, RSLs are already doing that, and they've told us they are confident that there shouldn't be a significant additional cost. But I'm keen to hear from the committee, because this is something we are all concerned with.