New analysis from LRG reveals that obstacles arising in leasehold constructions are pushing landlords away from flats, limiting upgrades and decreasing tenant confidence in how buildings are managed.
In line with its newest Lettings Report, 58% of flats let by landlords are leasehold. Amongst these, 46% of landlords say their biggest problem is coping with service fees, coordinating communal repairs, or having no management over selections.
These constraints are influencing funding selections, the report says. Over one-third of landlords (34%) now say they actively keep away from letting flats due to leasehold-related points or the complexity of constructing administration constructions.
The report additionally reveals that 58% of landlords at the moment let at the very least one flat, however many are reconsidering their place. With out reform, the brand new report concludes, leasehold lettings may proceed to say no which in flip would scale back the provision of reasonably priced housing at a time when demand is already excessive.
With tenants, solely 39% of these surveyed mentioned they’d confidence in how their constructing was managed. As well as, there may be dissatisfaction in flats that’s usually linked to points past the tenancy itself, notably the best way shared areas are maintained or managed.
Half of landlords consider EPC guidelines ought to replicate whether or not leaseholders are legally in a position to make the required upgrades. This echoes issues raised by Propertymark, which known as leasehold restrictions a major barrier to vitality compliance in its session response.
Prices are a rising concern too. In line with a UK Finance report in Might 2025, the common price of upgrading a property to EPC band C is round £6,800, rising considerably in older buildings and flats (UK Finance). For landlords in leasehold properties, these works usually require permission from freeholders or managing brokers, one thing that can not be assured.
The NRLA has additionally warned that the present authorities timeline to enhance the vitality efficiency of rental properties is unrealistic, notably in properties the place consent is required for building-wide enhancements.
Allison Thompson, nationwide lettings managing director at LRG, commented: “Flats are a significant a part of the rental market, notably for first-time renters and younger professionals. However many landlords are actually telling us they merely can’t meet expectations in these properties as a result of they don’t management the broader constructing.
“This isn’t about unwillingness. It’s about feasibility. Good landlords need to enhance properties, however the leasehold construction usually prevents significant motion. Reform is crucial if we’re severe about elevating requirements and giving tenants the properties they count on.”
