Landlords say government cannot deliver leasehold promises
Almost two-thirds of landlords (64%) think the government will be unable to deliver leasehold reform by the end of this parliament, according to new research from Landbay.
In March, the government said it would ban the sale of new leasehold homes by the end of this parliament in what ministers described as the end for a centuries-old “feudal system”.
But when the buy-to-let lender asked landlords if they thought this was achievable, only 36% of landlords said that they thought it was.
Under the current leasehold system, third-party landlords known as freeholders own the building and a leaseholder buys the right to occupy a flat within it for a fixed time period.
The government says it wants to move to a system of home ownership that is more in line with the rest of the world, known as commonhold, where homeowners own a share of and have control over they buildings in which they live.
A white paper published in March stated the sale of new leasehold flats would be banned and commonhold “reinvigorated” with a new legal framework.
Rob Stanton, sales and distribution director at Landbay, said: “The government’s ambition to abolish leasehold and transition to commonhold is a bold step towards modernising property ownership in the UK. But our research suggests there is a lot of scepticism out there among landlords, with nearly two-thirds doubting it can be achieved by the end of this parliament. While the intent to reform a system often seen as outdated is welcome, delivering such sweeping changes requires robust implementation. With the political demise of Angela Rayner, the abolishing of leasehold tenure is beginning to look less certain.”
Landbay’s research polled the views of landlords owning approximately 3,000 properties throughout England and Wales.
Landlords in the north of England were the most positive, with only 55% of those surveyed saying they thought the goal was unachievable. Landlords in Wales were more pessimistic, with 75% saying they thought the reforms wouldn’t happen.
Landlords operating predominantly as individuals were less likely to say that the government’s goal was unachievable (58%) compared to those making use of Ltd company structures (65%).
When Landbay asked landlords what they disliked the most about leasehold tenure, more than half (53%) said service charges while one in seven (14%) said poor infrastructure and neglect. A similar number (14%) said difficulty remortgaging. One in 14 said the cost of ground rent (7%). Only one in nine (11%) said they had no complaints about leasehold tenure.
Rob Stanton said: “Our research highlights the deep concerns over the leasehold system, with expensive service charges being landlords’ primary grievance, alongside issues like neglect and remortgaging challenges. The government’s push for commonhold is a step in the right direction. But the lack of confidence among landlords, particularly in Wales and among those making use of Ltd company structures, highlights the need for a clear, practical roadmap. Without robust policy execution, the transition risks stalling, leaving landlords and leaseholders in limbo.”