More than a third of landlords now avoid investing in flats because of leasehold-related issues or complex building management.
Research from LRG (Leaders Romans Group) reveals that leasehold structures are creating a growing barrier to progress in the rental sector, limiting upgrades, pushing landlords away from flats, and lowering tenant confidence in how buildings are managed.
According to its lettings report, 58% of flats let by landlords are leasehold. Of those, 46% say their biggest challenge is dealing with service charges, coordinating communal repairs, or having no control over decisions - which influences investment decisions.
The report also shows that 58% of landlords let at least one flat, but many are reconsidering their position. Without reform, it believes leasehold lettings could continue to decline and reduce the availability of affordable housing.
Tenants are noticing the impact as only 39% of those surveyed had confidence in how their building was managed. LRG says the findings indicate that dissatisfaction is often linked to issues beyond the tenancy itself, particularly the way shared areas are maintained or controlled.
Leasehold restrictions also affect landlords’ ability to meet government energy efficiency targets, half of whom believe EPC rules should reflect whether leaseholders are legally able to make the necessary upgrades.
According to UK Finance, the average cost of upgrading a property to EPC band C is about £6,800, rising significantly in older buildings and flats. But for landlords in leasehold properties, works often need permission from freeholders or managing agents - something that can’t be guaranteed.
Allison Thompson (pictured), national lettings managing director at LRG, says many landlords report that they can’t meet expectations in flats because they don’t control the wider building. “This is not about unwillingness, it is about feasibility,” explains Thompson. “Good landlords want to improve homes, but the leasehold structure often prevents meaningful action. Reform is essential if we are serious about raising standards and giving tenants the homes they expect.”
Tags:
Comments