The latest report from Propertymark, the professional membership body for property agents, has highlighted ongoing issues in the buying and selling of leasehold properties.
Five years after the release of Propertymark’s “Leasehold: A Life Sentence”, and following the implementation of the Leasehold Reform (Ground Rent) Act 2022, the agency has examined whether there have been any significant changes.
The new report, titled “Leasehold 2023: Has Anything Changed?”, was compiled based on a survey of its members.
According to the report, there has been an increased consumer awareness regarding leasehold issues since the legislation came into effect. However, it has also been noted that this heightened awareness has resulted in leasehold properties becoming more challenging to sell.
Among the findings from the survey are that 72% of agents believe homebuyers are now more aware of issues surrounding leasehold property, and 60% of prospective buyers request lease information before viewing a property.
Interestingly, 78% of agents agreed that properties with an escalating ground rent clause are challenging to sell, even if correctly priced.
Furthermore, 54% of agents selling property on behalf of developers reported that developers do not always provide necessary leasehold information.
Even though the Leasehold Reform (Ground Rent) Act 2022 restricts ground rents to zero for newly created long residential leases for individual properties, the report highlights that the reforms introduced since 2018 have not been adequate to completely resolve the issue.
The report emerges in the wake of an announcement made earlier this year by Michael Gove, Secretary of State for Levelling Up, Housing and Communities, who stated plans to abolish the UK’s “outdated feudal” leasehold system. According to the report, 42% of agents agree with the abolition of the leasehold, while 16% remain undecided.
Timothy Douglas, head of policy and campaigns, said: “Property agents play a key role in supporting home buyers and sellers, so it is positive to see that consumer awareness about leasehold information has increased. However, increasing awareness is only one piece of the puzzle.
“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.
“Furthermore, as with sales, lettings and managing agents, for developers, there are no minimum standards to work in the sector and there are no statutory rules to ensure those buying and selling leasehold property are suitably qualified.
“As highlighted by the findings in our report a whole sector approach is needed to further protect consumers and bring about positive change for leaseholders.”
