Editor's note: This brief was summarised by The Property AI Team from a report by PropertyWire. Read the original article for full details.
Leasehold Properties Face Significant Sale Delays
Leasehold properties are taking more than 100 days longer to sell compared to freehold homes, according to Spicerhaart Corporate Sales. The company, which manages property portfolios and distressed assets for major UK lenders, reports that leasehold properties now make up 54% of its managed stock and remain in possession for an average of over 250 days.
Spicerhaart attributes these delays to several factors, including shorter leases, rising costs of lease extensions, increasing ground rents and service charges, building safety requirements, and delays in obtaining management information from freeholders or management companies. The firm notes that, on average, leasehold transactions take around eight weeks longer to complete after an offer is accepted.
Regional Impact and Market Implications
The North of England has been identified as a region where these issues are particularly pronounced. Spicerhaart states that the combination of transaction delays and failed sales has led to more leasehold properties being sold at auction, contributing to wider challenges in the UK property market.
The extended sale periods for leasehold properties are also affecting institutional investors and lenders, especially those managing distressed assets. Spicerhaart highlights that these delays can impact portfolio valuations and capital allocation strategies.
Calls for Leasehold Reform
Spicerhaart Corporate Sales has called on the incoming prime minister to prioritise leasehold reform, citing the ongoing challenges for both leaseholders and lenders. The company acknowledges recent legislative changes as a positive step but urges further action to address longstanding issues in the leasehold sector.
Source: PropertyWire