More than three-quarters of estate agents have withdrawn at least one leasehold property from the market because it was effectively unsellable, new research suggests.
Propertymark found that more than 78% of agents had taken this step. Meanwhile, less than 1% said selling leasehold property had become easier over the past two years.
The trade body is now calling on the government to accelerate leasehold reform. It argues that existing homeowners need greater protection while the market moves towards commonhold.
Its report, Leasehold: Still a Life Sentence?, draws on responses from more than 1,200 leaseholders and 200 Propertymark members.
It found that 93% of leaseholders would not buy a leasehold property again. Some 86% had seen service charges increase over the past two years.
In addition, 89% said challenging unfair service charges was difficult.
Service charges hit sales
For agents, service charges appear to be a significant obstacle to transactions.
Almost three-quarters – 74% – identified onerous service charges as a major barrier to selling leasehold flats.
Propertymark members reported cases where annual charges had increased from around £1,000-£2,000 to £3,000-£4,000.
Higher charges can raise affordability concerns for buyers. In some cases, they can also affect mortgageability.
Agents also reported delays in obtaining information needed for leasehold transactions.
Some 40% said obtaining the necessary information can take more than 15 days and sometimes several months. Only 17% typically receive it within five days.
Timothy Douglas, head of policy and campaigns at Propertymark, said: “Nearly a decade after we first highlighted the problems with leasehold, too many homeowners are still navigating a system that can make their homes difficult, expensive and, in some cases, effectively impossible to sell.
“The move towards commonhold is welcome, but existing leaseholders cannot be expected to wait decades for change. If someone is facing an unaffordable service charge, a building safety problem or a property they cannot sell today, a better system in the future does not solve their problem.
“The UK Government must now go further and faster to unlock the market for existing leaseholders and restore confidence for consumers and property professionals.”
Building safety adds to problem
Propertymark also highlighted the continuing impact of building safety defects on leasehold transactions.
Its analysis suggests remediation of affected flats in England could take between 17 and 33 years. The timeframe depends on the number of buildings involved and the pace of remediation.
Unresolved defects can make properties harder to mortgage and sell.
The report highlights the experience of a homeowner named Stacey, who bought a new-build flat in the North West for £150,000 in 2009.
After starting a family, she tried to move. However, four sales fell through between 2018 and 2022.
Propertymark said cladding concerns initially caused problems. Building safety and ground rent issues subsequently affected attempts to sell.
She returned the flat to the market in 2024 at £130,000 – £20,000 below its 2009 purchase price.
Stacey said: “I wish I had known 18 years ago what I know now. We’re stuck, we can’t sell it, we can’t move out because we cannot afford two mortgages.”
Propertymark calls for faster reform
Propertymark wants the government to bring forward the proposed 40-year transition for reducing ground rents to a peppercorn.
It also wants standardised lease terms, stronger redress over service charges and an online database of lease information.
The trade body is calling for simpler building safety remediation and clearer responsibility for costs. It also wants ministers to consider financial support for leaseholders buying their freehold and moving towards commonhold.
Douglas added: “A functioning housing market depends on people being able to move. If a homeowner cannot sell, a chain cannot progress, a first-time buyer cannot take their next step, and another property cannot enter the market.
“Leasehold reform is therefore not just about changing a legal tenure. It is about restoring confidence, mobility and fairness to the housing market.
“After almost ten years of recognising that the system needs fundamental change, the time for further delay has passed.”
