Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Leasehold Reform Urged as New Prime Minister Takes Office
A recent report has called on the new Prime Minister, Andy Burnham, to prioritise leasehold reform. The report highlights ongoing issues in the UK property market, particularly for those managing and selling leasehold properties.
The report notes that leasehold reform has been a political focus, with previous legislation introduced by the Conservative government and further commitments made by Labour under Sir Keir Starmer. Labour's manifesto included proposals for a fairer system centred on commonhold and the end of high ground rent and service charges.
For property professionals, the report outlines the practical challenges caused by the current leasehold framework. It states that the number of leasehold properties coming into possession has grown month on month, with apartments and flats making up the largest share. Leasehold properties are described as more difficult to sell than freehold properties, with factors such as shortening lease terms, increasing ground rents, service charges, and building safety requirements all contributing to reduced market appeal and increased caution from mortgage lenders.
The report also highlights administrative delays, particularly in obtaining management information from freeholders or management companies. These delays can extend the time properties remain in possession and affect sale values. According to the report, leasehold properties are in possession for over 250 days on average—more than 100 days longer than freehold properties—and sales take around eight weeks longer to complete once an offer is accepted.
The impact of these issues is said to extend beyond lenders, affecting borrowers, buyers, and local housing market liquidity. The report specifically mentions challenges in the North of England, especially the North East, where there is a higher concentration of leasehold apartments.
The report concludes by emphasising the need for urgent progress on leasehold reform to address these ongoing challenges in the UK property sector.
Source: Mortgage Strategy