Heightened consumer awareness combined with a lack of government action has made leasehold property even harder to sell, landlords and home owners have been warned.
Despite government pledges and the introduction of the Leasehold Reform (Ground Rent) Act 2022, a new Propertymark report finds that it has not gone far enough to completely resolve the issue.
The Act restricts ground rents to zero but only on newly created long residential leases for single properties.
One of the most high-profile issues associated with leasehold property was a recent practice imposed by some developers to include an escalating ground rent in their leasehold agreements.
Struggle
Propertymark’s member poll reveals that 78% of agents said leasehold property with an escalating ground rent would struggle to sell, even if priced correctly.
It adds that 72% of agents believe homebuyers are more aware of issues surrounding leasehold property.
But 54% of agents who sell property on behalf of developers report that they don’t always provide the pertinent leasehold information, and while 51% of buyers ask about cladding before they view a property, 11% say buyers only ask after they have agreed to buy.
Extension
To further support leaseholders, agents want to see an extension of the requirements to restrict ground rents, lease lengths to be extended to 999 years, an improvement on how information can be obtained from management companies, and more clarity on processes and rights for acquiring the freehold.
Timothy Douglas (pictured), head of policy and campaigns, says: “Policymakers must do more to create a level playing field with those who already own a leasehold property, make enfranchisement easier, simplify the process for lease extensions and where there is no managing agent, freeholders must sign up to a redress scheme.
“A whole sector approach is needed to further protect consumers and bring about positive change for leaseholders.”
