If you run claimant Housing Disrepair files on a standard basis, you already know the awkward truth: hourly rates are one of the quickest ways a paying party tries to “trim” your bill without having to engage with the real work done.
That is exactly why the Guideline Hourly Rates (GHR) update for 1 January 2026 matters. The rates have been uprated for inflation, and that shift feeds directly into:
• settlement negotiations on bills and points of dispute
• N260 schedules on interim applications
• proportionality arguments
• and the court’s starting point on summary assessment
HMCTS’ published guidance describes these figures as guideline rates for summary assessment of court costs in England and Wales. (GOV.UK)
This article explains what changed for 2026, how courts tend to treat guideline rates, and how claimant firms can protect profit on standard basis matters.
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The Master of the Rolls announced an inflation uplift to the guideline hourly rates, effective Thursday 1 January 2026, with the uplift from the 2025 figures to the 2026 figures stated as 2.28%. (Courts and Tribunals Judiciary)
The Guideline Hourly Rates from 1 January 2026
These are the headline figures (all per hour): (GOV.UK)
London 1
• Grade A: £579
• Grade B: £393
• Grade C: £305
• Grade D: £210
London 2
• Grade A: £422
• Grade B: £327
• Grade C: £276
• Grade D: £157
London 3
• Grade A: £319
• Grade B: £262
• Grade C: £209
• Grade D: £146
National 1
• Grade A: £295
• Grade B: £247
• Grade C: £201
• Grade D: £142
National 2
• Grade A: £288
• Grade B: £247
• Grade C: £200
• Grade D: £142
Grade definitions (A–D) are also set out in the HMCTS guidance (for example, Grade A is solicitors/legal executives with over 8 years’ experience). (GOV.UK)
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Yes, they’re “guidelines”. No, you can’t assume the court will rubber-stamp anything higher.
A useful authority to keep front-of-mind is Samsung Electronics Co Ltd v LG Display Co Ltd (Costs) [2022] EWCA Civ 466. In that case, the Court of Appeal cut claimed rates that were well above guideline levels and made clear that if rates exceed the guideline, a “clear and compelling justification” is required. (Costs Barrister)
That approach is exactly what paying parties lean on when they want to push you down to guideline rates (or below them).
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Housing Disrepair litigation has its own features that often justify careful, structured costs presentation:
• repeated attendance and correspondence around access, vulnerability, and urgent works
• heavy documentary sequences (photos, schedules of condition, medical evidence where relevant)
• multiple experts or addenda, and frequent disclosure churn
• defendant delay and tactical behaviour that increases the work done
The problem is not that the work is not reasonable. The problem is that if it is not packaged properly, defendants will argue:
• “routine work”, so Grade B or C rates only
• “template documents”, so reduced time
• “proportionality”, so global haircut
The 2026 GHR increase is helpful, but it only converts into recovered profit if your bill and negotiations make the court’s job easy.
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1) Treat fee earner grade as a pleading point, not an admin field
If your Grade A is doing Grade C work, you are gifting reductions. Match task type to grade and show it in the narrative.
2) Use the right band and be able to justify it quickly
National Banding isn’t guesswork. The HMCTS guidance lists what falls into National 1 and National 2 and even includes city-specific references (for example, it lists Manchester (Central) within National 1). (GOV.UK)
If your office/client base is outside those areas, expect the paying party to argue National 2.
3) If you want above-guideline rates, build the justification into the documents
Samsung is the warning sign: saying “this is complex” is not enough. (Costs Barrister)
If you need enhanced rates, make sure your bill narrative and (if relevant) your witness evidence explains why this case warrants it.
Examples that tend to land better than vague wording:
• unusual urgency (injunction threats, immediate risk, repeated access failures)
• exceptional volume of documents or expert addenda
• complex causation/overlap (multiple defects, multiple tenancies, mixed liability positions)
• procedural complexity (multiple applications, sanctions issues, relief, etc.)
4) Don’t let the defendant turn “guideline” into “cap”
Guideline rates are not automatically the ceiling. But if you do not give the court a reason to depart, the court will often default to them.
5) Tie rates to outcomes in negotiation
Defendants negotiate like accountants. Make it commercial:
• “We are already at guideline for Grade C/D work.”
• “We will not trade rate for time twice.”
• “If you want reductions, identify what was unreasonable, not what you dislike.”
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• Update your internal costs assumptions and precedent wording to reference GHR 2026 for work done from 1 January 2026. (GOV.UK)
• Check your team’s grade allocation on file (A/B/C/D).
• Refresh N260 templates (interim apps) so your claimed rates align with the new guidelines where appropriate.
• Where you anticipate a rate challenge, start documenting “why this case is different” early, not at the end.
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At DMD Costs, we work B2B for solicitors on standard basis (non-FRC) costs. We do not act for lay clients and we do not provide advocacy.
What we actually do for firms:
• draft Bills and e-Bills with persuasive narratives and clean phase coding
• produce particularised Points of Dispute and Replies (CPR-grounded, built to move numbers)
• prepare N260s and costs-only packs where needed
• negotiate to settlement with a structured offer strategy
Free trial for HDR costs: send one matter ready for costing and we will draft the bill and run it to settlement so you can judge us on results.