A corporate property sales firm has called on the incoming prime minister to prioritise leasehold reform, citing significant delays in property transactions that are affecting lenders and investors.
Spicerhaart Corporate Sales, which manages property portfolios and distressed assets for major UK banks, building societies and lenders, reports that leasehold properties now account for 54% of its managed stock. The company states these properties remain in possession for an average of more than 250 days – over 100 days longer than freehold homes.
Transaction delays
According to the firm, leasehold properties typically take around eight weeks longer to complete once an offer has been accepted. The company attributes the delays to shorter leases, rising costs of lease extensions, increasing ground rents and service charges, building safety requirements, and delays obtaining management information from freeholders or management companies.
The North of England has been identified as an area where the issue is particularly acute. The combination of delays and failed sales has resulted in more leasehold properties being sold at auction, adding to broader challenges in the UK property market.
Impact on lenders and buyers
“As leases become shorter, properties become less attractive to buyers and mortgage lenders, while the cost of extending a lease can rise significantly,” the company stated.
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 [Andy Burnham] has an obvious focus.”
The appeal comes as Andy Burnham is expected to become prime minister within days. Miller added that recent reforms had been a positive step with cross-party support, but urged that momentum should not be lost due to leadership changes.
Market implications
The extended sale periods for leasehold properties present challenges for institutional investors and lenders managing distressed assets. The data suggests leasehold transactions are taking significantly longer than broader trends in UK home sales, potentially affecting portfolio valuations and capital allocation strategies.
While acknowledging recent leasehold legislation as progress, Spicerhaart argues further reform is needed to address longstanding issues affecting both leaseholders and lenders in the property market.
