The UK's leasehold crisis has reached boiling point, leaving thousands of homeowners trapped by unaffordable costs and unable to sell their properties. A damning report from Propertymark reveals the government's Leasehold and Freehold Act has made little progress in addressing the issue, with estate agents consistently struggling to offload leasehold homes.
Disillusioned leaseholders are speaking out against the system, with a staggering 93% saying they would not buy another leasehold property unless absolutely necessary. The financial burden is crippling; over 86% of leaseholders have seen service charges soar in the past two years, with more than one in four experiencing rises exceeding 60%. Ground rents and excessive service charges are now major obstacles to selling their homes for 58% and 53% of leaseholders respectively.
Estate agents echo these concerns, with fewer than 1% reporting an easier time selling leasehold properties. Over 76% find it more challenging, while a staggering 78% have had at least one leasehold property removed from the market due to its unsellable status. Key issues include excessively high service charges, rapidly increasing ground rents, and short lease terms – all deterring potential buyers and mortgage lenders.
The issue is compounded by ongoing building safety concerns, particularly the requirement for External Wall System (EWS1) forms. Without a satisfactory certificate, many mortgage lenders refuse to provide financing, making properties in affected blocks extremely difficult to sell. This has led to confidence in the leasehold market being eroded, according to letting agents.
Industry leaders are calling for urgent action. Katie Kendrick OBE, founder of the National Leasehold Campaign, described leasehold as a 'life sentence' and criticised the slow pace of reforms. She highlighted that despite years of commitments, too many leaseholders remain unable to move due to unaffordable costs. Sebastian O'Kelly, director at the Leasehold Knowledge Partnership, reinforced this, stating that leaseholders are 'trapped' by escalating charges and unfulfilled promises.
While the government has announced further reforms aimed at providing clearer information on service charges and stronger protections against unfair costs, critics argue these measures do not go far enough to address the plight of existing leaseholders. The ambition to transition to commonhold is welcomed, but acknowledged as a long-term goal that will not provide immediate relief to those currently facing severe difficulties.