Leasehold isn’t the enemy: 78% of leaseholders say ownership has worked out positively
Despite years of scrutiny calling leasehold a broken system, new research shows that most leaseholders don’t regret their purchase at all. According to the findings, 78.1% of leaseholders say leasehold ownership has had a positive or neutral impact, with 45.1% describing the impact as positive outright. Indeed, government research indicates that more than nine in ten leaseholders surveyed were either satisfied or neutral about their accommodation.
The research also challenges the narrative that leaseholders are being kept in the dark about what they’re signing up for. The majority, 80% of leaseholders say they clearly understood the terms of their agreement before purchase – a level of transparency driving the positive sentiment recorded across the study.
The findings arrive at a crucial moment in the ongoing debate over the Leasehold and Commonhold Reform Bill, where much of the public and political conversation has been shaped by high-profile stories rather than by data on how the average leaseholder experiences ownership. Justice for Property Rights argues that this new research offers much-needed reform, based on the real-life experiences of leaseholders.
Just 15% of leaseholders describe themselves as dissatisfied with their current ownership experience, and campaigners say the right reforms could bring that number down further.
Crucially, the research finds that where dissatisfaction exists, it overwhelmingly centres on the management of the property – service charges, poor communication from managing agents, and a lack of transparency over costs – rather than the leasehold structure itself.
The research shows that costs such as buildings insurance, major works bills, managing agent fees and legal fees have all risen significantly, while ground rent predominately remains fixed – raising the question of why ground rent has attracted such disproportionate scrutiny while these other rising costs go largely unaddressed.
Much of the political and media focus on leasehold reform has centred on capping or abolishing ground rent, often framed as the single biggest financial burden on leaseholders. This research finds that framing may be missing the bigger picture. Service charges, buildings insurance premiums, major works bills and managing agent fees have all climbed significantly and are what affects people’s standards of living. In comparable ground rents are generally so low (£100 PA see below) they rarely register as a problem for leaseholders.
Justice for Property Rights argues that if the goal of reform is genuinely to ease the financial pressure on leaseholders, policy attention needs to widen out to cover the full basket of costs leaseholders face, rather than concentrating almost exclusively on ground rent. A narrow focus, however politically convenient, risks leaving the reforms that would make the most difference to leaseholders’ daily lives unaddressed.
Richard Merrin, spokesman for Justice for Property Rights, states that the findings should reframe the debate around leasehold reform.
“Leaseholders can value their home while still wanting the system around it improved – that’s not a contradiction, and it’s certainly not a reason to tear the whole model down. What this research shows is that people understood what they were buying into. The real, day-to-day frustration isn’t the leasehold structure itself – service charges, it’s opaque billing, it’s managing agents who don’t communicate properly – this is where reform should be working towards.”
Justice for Property Rights says the data should serve as a helpful guide for any legislature discussion that has consistently failed to disclose the full picture of largely positive leaseholder sentiment and a clear understanding of contract terms amongst buyers.
Merrin concludes: “The story being told about leasehold doesn’t match the experience of the leaseholders themselves. If we want reform that actually helps people, we need to be honest about where the problems really lie – and right now, the evidence points at service charges and transparency, not at the existence of leasehold as a form of tenure. Any reform that fails to address these day-to-day concerns, will miss the issues that matter most to the people it is meant to help.”
Merrin concludes: “With around five million residential leaseholds in this country, and government statistics reporting the median ground rent is under £100 the idea that all of these contracts should be changed retrospectively is the most dramatic example of undermining property rights in British history. That consequently undermines UK contract law and our global reputation.
“Appropriate legislation should fix the few remaining high ground rents, on low value flats with ten-year doubling clauses, rather than adopt a scattergun approach against all ground rents which will lead to the unintended consequence of massive wealth transfers from those on modest incomes to rich buy-to-let landlords.
However, if the legislation is intended to accelerate the move to and reduce the cost of making commonhold thereby making it the default, let the government acknowledge this as a profound public policy change that requires fair market rate compensation for the freeholders disadvantaged. To do otherwise is simply expropriation of people’s assets.”