Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.

Estate Agents Withdraw Unsellable Leasehold Properties from Market

More than three-quarters of estate agents have withdrawn at least one leasehold property from the market because it was effectively unsellable, according to new research by Propertymark. The trade body found that over 78% of agents had taken this step, while less than 1% said selling leasehold property had become easier in the past two years.

Propertymark is calling on the government to accelerate leasehold reform, arguing that existing homeowners need greater protection as the market moves towards commonhold. Its report, "Leasehold: Still a Life Sentence?", is based on responses from more than 1,200 leaseholders and 200 Propertymark members.

The report found that 93% of leaseholders would not buy a leasehold property again. Additionally, 86% had seen service charges increase over the past two years, and 89% said it was difficult to challenge unfair service charges.

Service Charges and Transaction Delays

For estate agents, service charges are a significant obstacle to selling leasehold flats. Nearly three-quarters (74%) identified onerous service charges as a major barrier to sales. Propertymark members reported cases where annual charges had risen from around £1,000-£2,000 to £3,000-£4,000, raising affordability concerns for buyers and affecting mortgageability.

Agents also reported delays in obtaining information needed for leasehold transactions. 40% said it can take more than 15 days, and sometimes several months, to receive the necessary information. Only 17% typically receive it within five days.

Building Safety and Market Impact

Propertymark highlighted the ongoing impact of building safety defects on leasehold transactions. Its analysis suggests that remediation of affected flats in England could take between 17 and 33 years, depending on the number of buildings and the pace of remediation. Unresolved defects can make properties harder to mortgage and sell.

The report included the experience of a homeowner named Stacey, who bought a new-build flat in the North West for £150,000 in 2009. After four failed sales attempts between 2018 and 2022, she returned the flat to the market in 2024 at £130,000, £20,000 below its original purchase price. Cladding, building safety, and ground rent issues were cited as reasons for the failed sales.

Calls for Reform

Propertymark is urging the government to bring forward the proposed 40-year transition for reducing ground rents to a peppercorn, introduce standardised lease terms, strengthen redress over service charges, and create an online database of lease information.