More than nine in 10 leaseholders say they would not buy a leasehold property again as rising service charges and difficulties selling continue to undermine confidence in the tenure.
New research from Propertymark finds 93% would avoid leasehold in future, while 86% have seen their service charges increase during the past two years and 89% believe challenging unfair charges is difficult.
The findings, based on responses from more than 1,200 leaseholders and 200 Propertymark members, also point to growing problems when owners attempt to sell.
More than 78% of estate agents have taken at least one leasehold property off the market because it was unsellable, while fewer than 1% say selling leasehold homes has become easier over the past two years.
SALES BARRIERS
Onerous service charges are identified as a major barrier to selling leasehold flats by 74% of agents.
Propertymark says members report cases where annual service charges have increased from around £1,000–£2,000 to £3,000–£4,000, creating affordability concerns and potentially affecting mortgageability.
Delays obtaining information are adding to the problem. Some 40% of members say it can take more than 15 days – and sometimes months – to obtain the leasehold information required for a transaction, while just 17% typically receive it within five days.
Timothy Douglas (main picture, inset), Head of Policy and Campaigns at Propertymark, says: “Nearly a decade after we first highlighted the problems with leasehold, too many homeowners are still navigating a system that can make their homes difficult, expensive and, in some cases, effectively impossible to sell.
“The move towards commonhold is welcome, but existing leaseholders cannot be expected to wait decades for change. If someone is facing an unaffordable service charge, a building safety problem or a property they cannot sell today, a better system in the future does not solve their problem.”
FASTER REFORM
Propertymark is calling on the UK Government to accelerate reforms for existing leaseholders alongside its longer-term move towards commonhold.
Its recommendations include bringing forward the proposed 40-year transition for reducing ground rents to a peppercorn, standardising lease formats, strengthening redress over service charges and creating an online database of lease terms to speed up transactions.
Douglas adds: “A functioning housing market depends on people being able to move. If a homeowner cannot sell, a chain cannot progress, a first-time buyer cannot take their next step, and another property cannot enter the market.”
