The latest survey from Propertymark reveals a stark reality for UK leaseholders: 93% would avoid buying another leasehold property. This is a clear signal that the current leasehold framework is failing to inspire confidence among those living under it. For investors, this presents both a challenge and an opportunity.
Service charges are a major pain point. With 86% of leaseholders reporting increases over the past two years, costs are rising faster than many expected. This trend puts pressure on rental yields and resale values in leasehold properties, as tenants and buyers factor in unpredictable and often escalating fees. Moreover, 89% of respondents found it difficult to contest unfair service charges, highlighting a lack of transparency and recourse that undermines market trust.
From an investment perspective, the call from Propertymark to accelerate leasehold reform is worth monitoring closely. If the government responds with meaningful changes, such as clearer rules on service charges and easier enfranchisement processes, it could restore some confidence and stability to leasehold assets. Until then, investors should exercise caution, particularly in developments heavily reliant on leasehold structures with opaque service charge regimes.
Data from Prop AI Deals shows that regions with a high concentration of leasehold flats are already experiencing slower price growth compared to freehold properties. This divergence may widen if reforms stall, potentially creating pockets of undervalued stock but also increased risk. Leasehold properties remain a significant part of the UK housing stock, so any reform will have wide-reaching implications for portfolio strategy and asset management.
Source: Property118
