Leasehold reform: what it could mean for Yorkshire homeowners
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The property market is changing for owners across Yorkshire – here, Mark Laird of Morrish Solicitors LLP, explains the practical impact of the proposals.
The government’s plans to phase out leasehold ownership and ban new leasehold flats could mark a major shift for homeowners across Yorkshire, where leasehold properties remain common in city centres and large housing developments.
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Mark Laird, Head of Property at Leeds-based Morrish Solicitors LLP, says the proposals reflect growing concern about a system many homeowners feel gives them limited control over their own homes.
“Leasehold has long been part of the housing landscape in Yorkshire, particularly for flats, but it’s also a system that can leave people feeling uncertain about costs, control and long-term value,” says Laird.
What is leasehold ownership?
Leasehold means owning the right to live in a property for a fixed period of time, rather than owning the property and land outright. Leases are often granted for 99 years or more, and when long, their value can appear similar to freehold ownership.
The difficulty arises as the lease shortens. As the remaining term reduces, so typically does the value of the property, sometimes making it harder to sell or remortgage.
We regularly advise Yorkshire homeowners who are surprised to learn that their property is effectively a depreciating asset. That often only becomes apparent when they come to sell or speak to a mortgage lender.”
Most lenders will not lend on properties with fewer than 70 - 80 years remaining on the lease, which can restrict buyer demand.
Why is the government reforming leasehold?
Ministers have described the residential leasehold system as outdated, pointing to longstanding concerns including:
- Escalating or excessive ground rents;
- Unclear or unpredictable service charges;
- Limited control for leaseholders over building management;
- High costs for lease extensions;
- Difficulties selling or remortgaging short leases.
These issues are familiar across Yorkshire, particularly in urban areas where large numbers of leasehold flats were built in recent decades.
Ground rent and service charges explained
Ground rent is an annual payment made to the freeholder, often without any corresponding service. Some older leases contain provisions for ground rent to increase over time, causing financial strain.
Service charges, meanwhile, are intended to cover the cost of maintaining and insuring the building. They may include repairs, cleaning of communal areas, insurance and upkeep of shared spaces.
The biggest frustration we hear from leaseholders is a lack of transparency. People want to know what they’re paying for and to have more say in how their building is managed.
Why leasehold exists, and what may replace it
Leasehold ownership has traditionally provided a legal framework for flats, allowing individual units to be sold while ensuring the building can be maintained and insured. Lease conditions also help regulate behaviour and prevent neighbour disputes.
If leasehold is banned for new flats, commonhold is expected to become the default alternative. Under commonhold, owners own their property outright and collectively manage shared areas.
Although commonhold has existed in law since 2002, fewer than 20 developments currently operate under the system.
“A move towards commonhold would represent a major cultural shift for homeowners and the legal profession alike,” comments Laird. “There will inevitably be a period of adjustment and uncertainty.”
It remains unclear how reform will affect existing leasehold properties, though there is concern buyers may favour commonhold homes in future.
What should homeowners do now?
For now, experts advise leaseholders not to panic, but to understand the terms of their lease, particularly its length and cost provisions.
“Reform won’t happen overnight,” Laird concludes. “But good advice now can help Yorkshire homeowners protect their investment and make informed decisions.”
Expert help, closer to home
Morrish Solicitors’ residential property team supports homeowners at every stage of the process, from first-time purchases to complex lease extensions. Their services can be provided in-person, over the phone, by email or post. Contact [email protected] or call 033 344 9607. Alternatively, you can make an appointment at one of their offices in Leeds, Bradford, Pudsey or Yeadon.