Download our report: Leasehold 2023: Has Anything Changed? →
Sustained research
Following our 2018 report Leasehold: A Life Sentence, where we identified thousands of homeowners were stuck in leasehold houses they cannot afford to live in and cannot sell, our continued lobbying to drive legislative change was instrumental in The Leasehold Reform (Ground Rent) Act 2022 coming into place.
However, this only related to new leases and didn’t address existing homeowners who have a property with escalating ground rent. 78% of our agents stated will struggle to sell these properties, even if priced correctly. This highlights the importance that further legislation is required.
Some key aspects of our leasehold research
Consumer awareness
Propertymark agents saw a 72% increase in homebuyers’ awareness of the issues surrounding leasehold property than five years ago and now ask for leasehold particulars before they view the property.
67% have been encouraged to negotiate harder on leasehold property, which suggests issues surrounding leasehold are artificially restricting prices of these properties, and as a result, future change in legislation would ease such issues to see a rise in the value.
Managing and selling leasehold
92% of letting agents who responded to our survey reported managing leasehold property. 44% of those reported they sometimes struggle with the freeholder’s managing agent. Further commentary suggested that this is primarily based on communication delays.
However, many leaseholders continue to face issues buying and selling within buildings over 11m tall. Barriers and solutions to the issues consumers face in obtaining a mortgage on leasehold property are affected by the Building Safety regulations, with 51% of potential buyers asking about cladding before they view. Alarmingly though, 11% asked after they agreed to purchase and 16% asked when the bank queries the situation as part of the buying process.
As the legislation is relatively new, it is clear that more needs to be done to raise awareness.
Material information
74% of member agents reported they regularly advertise the leasehold particulars when marketing a property for sale.
Propertymark’s updated Property Information Questionnaire dives deeply into leasehold property so buyers and fully aware and this can also speed up the buying process at the conveyancing stage.
Solutions to leasehold reform
Propertymark wants to see further restricting of ground rents, more awareness for property professionals and consumers on cladding issues and the intricacies of obtaining mortgages on affected properties. Plus, address the concerns of members regarding the short period of many leases, the high cost of renewing a lease, difficulties obtaining information from management companies, and the need for clarity of process and rights for acquiring the freehold.
Other areas for concern include issues with struggling to sell properties that have signed leases since June 2022, the need to cap existing rents, extend leases to 1000 years and cap both lease extension and freehold purchase costs. All of these would need further legislative updates.
We will continue to work with the UK Government, the Welsh Government and policymakers to drive further change and reform.
Property agents play a key role in supporting home buyers and sellers, so it is positive to see that consumer awareness about leasehold information has increased. However, increasing awareness is only one piece of the puzzle.
Policy makers must do more to create a level playing field with those who already own a leasehold property, make enfranchisement easier, simplify the process for lease extensions and where there is no managing agent, freeholders must sign up to a redress scheme.
Furthermore, as with sales, lettings and managing agents, for developers there are no minimum standards to work in the sector and there are no statutory rules to ensure those buying and selling leasehold property are suitably qualified. As highlighted by the findings in our report a whole sector approach is needed to further protect consumers and bring about positive change for leaseholders.
Leasehold and Freehold Reform: what has changed?
The Labour Government has committed to driving forward the enforcement of the Leasehold and Freehold Reform Act 2024. Propertymark has campaigned on leasehold reform since 2017, including the lack of a ban on new leaseholds, restrictions on ground rent, and no ground rent cap for existing leaseholders. This research, produced in 2023, highlights the ongoing issues and sentiments of Propertymark Member agents and is still prevalent in our campaign to drive change.
