Asset management specialists at Spicerhaart Corporate Sales are calling on the next Prime Minister to prioritise leasehold reform and replacement, as the number of leasehold properties coming into possession continues to increase.
Spicerhaart Corporate Sales, which manages property portfolios and distressed assets for major UK banks, building societies and lenders, says that leasehold properties now account for more than half (54%) of the stock it manages. This proportion, which is mainly made up of leasehold apartments, continues to increase month on month as longstanding systemic issues create challenges for property owners and lenders.
The business says the current leasehold system is making it increasingly difficult to achieve timely sales. As leases become shorter, properties become less attractive to buyers and mortgage lenders, while the cost of extending a lease can rise significantly. Combined with rising ground rents, increasing service charges and ongoing building safety requirements, these factors are creating significant barriers to transactions and leaving many leasehold properties sitting on the market for far longer than they should.
Administrative burden is also causing widespread frustration. Delays in obtaining essential management information from freeholders or management companies can add weeks or even months to the sales process, while the cost of these packs continues to rise. Unresponsive or absent freeholders further complicate matters, making it difficult to secure the approvals needed to complete a sale or resolve defects within the lease
Together, these issues are contributing to lengthy delays, failed sales and, in many cases, properties ultimately being sold at auction. According to Spicerhaart Corporate Sales, the average time in possession for leasehold properties is over 250 days – more than 100 days longer than freehold properties, with leasehold sales taking around eight weeks longer to complete once an offer is accepted.
With leasehold reform a manifesto commitment, Spicerhaart Corporate Sales is calling on the next Prime Minister to make completing the work already underway a clear priority. While recent legislation has provided a step forward, the company says further action is needed to resolve the longstanding issues preventing leasehold properties from moving efficiently through the market. This is particularly important in the North of England, where Spicerhaart say there is a significant proportion of affected properties.
David Miller, divisional sales director at Spicerhaart Corporate Sales, said: “There is a clear opportunity for the next Prime Minister to deliver meaningful change for thousands of leaseholders across the country – particularly in the North of England, where the current frontrunner has an obvious focus. While recent reforms have been a positive step forward and gained cross-party support, the revolving door at Number 10 shouldn’t mean momentum is lost. Whoever takes over the top role must make leasehold reform a clear priority.
“Through our work managing property portfolios on behalf of some of the UK’s largest lenders, we see firsthand how the challenges within the current system delay sales, reduce property values and create uncertainty for homeowners and lenders. A simpler, fairer leasehold system would benefit everyone involved in the housing market – improving confidence, unlocking transactions and delivering better outcomes. Stifling this important reform shouldn’t be the casualty of a change in leadership.”
