Leasehold Drag: Why These Homes Now Take 100 Days Longer to Sell

Leasehold properties in England and Wales are now taking upwards of 250 days to complete a sale, more than 100 days longer than comparable freehold homes, according to new figures from a corporate property sales firm. The disparity, which has widened steadily over the past two years, has prompted the firm to issue a direct appeal to the incoming prime minister to prioritise leasehold reform as a matter of economic urgency rather than a niche legal tidy-up. For a tenure that still accounts for roughly one in five residential transactions in England, and the overwhelming majority of flats in cities such as London, Manchester and Leeds, a 40 per cent extension in average time-to-completion is not a footnote. It is a structural drag on liquidity across an entire segment of the housing stock.

The reasons behind the delay are well understood by conveyancers but poorly appreciated by the wider market. Leasehold transactions require freeholder or managing agent sign-off, service charge accounts, building insurance confirmations, and increasingly, remediation statements tied to cladding and fire safety works. Each of these introduces a third party with no financial incentive to move quickly. Where a freehold sale might involve two solicitors and a mortgage lender, a leasehold flat sale in a converted block can involve a managing agent, a freeholder, a superior landlord, a buildings insurer and sometimes a resident management company, all of whom must respond to a leasehold information pack before exchange can even be contemplated. Delays of six to eight weeks simply obtaining a management pack are now common, and in blocks still awaiting EWS1 remediation, the wait can stretch into many months.

For buy-to-let landlords, this is more than an inconvenience. A property sitting unsold for 250-plus days is a property generating no rental income to its prospective new owner, tying up capital that could otherwise be redeployed into higher-yielding stock in Birmingham, Newcastle or Liverpool, where flat prices remain comparatively affordable and rental yields have held above 6 per cent through 2024. Portfolio landlords looking to rebalance ahead of anticipated further tax and regulatory pressure on the private rented sector are finding that leasehold flats, often their most liquid-seeming assets on paper, are in practice their slowest to shift. This is reshaping disposal strategies: several regional agents report landlords increasingly favouring freehold houses in secondary locations over leasehold flats in city centres specifically because of exit-timing risk, even where headline yields on flats look superior.

Lenders are equally exposed, and this is the detail that should concentrate minds in Whitehall. Mortgage offers typically carry a validity window of three to six months. When a leasehold chain drags past that point, buyers are forced back to relenders, incurring fresh valuation fees, potential rate changes, and in a rising-rate environment, materially worse terms than those originally agreed. Several major lenders have already tightened criteria on flats with short remaining lease terms or unresolved service charge disputes, effectively pricing leasehold risk into product availability rather than waiting for legislative fixes. This creates a feedback loop: slower sales beget tighter lending criteria, which further slows sales. First-time buyers, who are disproportionately reliant on leasehold flats as an affordable entry point in London, Surrey and the South East, are bearing the brunt of this tightening even though they had no hand in creating the structural problem.

The Leasehold and Freehold Reform Act, passed in the dying days of the last Parliament, promised to simplify extensions, ban new leasehold houses, and cap ground rents, but much of its substance was deferred to secondary legislation that has yet to be drafted, let alone implemented. That legislative limbo is precisely what the property sales firm is warning against: reform that exists in statute but not in practice does nothing to speed up management packs or compel freeholders to respond within statutory timeframes. Until the secondary legislation defines standardised timescales and fee caps for information requests, the market disruption will persist regardless of the headline reform having technically passed.

Looking ahead six to twelve months, expect the leasehold-freehold sale-time gap to remain wide, and possibly widen further, as more blocks come under scrutiny for building safety compliance ahead of the Building Safety Act's evolving deadlines. Commercial investors eyeing build-to-rent conversions or purchasing freeholds as an asset class should treat this delay premium as a permanent feature of pricing, not a temporary anomaly; freehold ground rent portfolios are already being repriced downward by buyers factoring in slower associated flat sales and reputational risk from tenant disputes. Developers bringing new leasehold-adjacent products to market, including commonhold pilots once the government's promised commonhold reset materialises, have a genuine first-mover opportunity to differentiate on speed and transparency. For everyone else, the message is blunt: leasehold remains a tenure where paperwork, not price, is now the primary determinant of how quickly capital gets recycled, and until Westminster turns legislative intent into enforceable timescales, that 100-day penalty is effectively a permanent tax on liquidity.