What to watch out for when buying leasehold

Most flats in England and Wales are leasehold. So are some houses, though new leasehold houses are mostly banned now under the Leasehold Reform (Ground Rent) Act 2022. Buying leasehold drags more legal work into the process, and there are a few specific things that can affect the timeline, the cost, and what the place is worth later on.

How long is left on the lease?

This is the big one. Most lenders want a minimum number of years left on the lease after you complete — usually 70 to 85 years. Below 80 years a lease is considered “short”, and extending it gets a lot more expensive because of the way the statutory extension is calculated.

If there's less than 80 years on the lease, work out (or get a quote for) the cost of extending and bring it into your negotiation on the price. Your conveyancer should call this out, but ask anyway.

Service charge and ground rent

The leasehold information pack from the freeholder or managing agent comes with the recent service charge accounts. Read them. Look for big upcoming works in particular — a roof or external repair job can trigger a Section 20 major works notice and a bill into the tens of thousands, and that bill can land on you as the new owner.

Ground rent: leases granted from June 2022 onwards can't charge more than a peppercorn (effectively nothing). On older leases, look at the review clause. Escalating ground rents — especially ones that double at fixed intervals — can mess with mortgageability and resale.

The management pack, and why it slows things down

Your conveyancer has to get a leasehold information pack (sometimes called a management pack or LPE1 form) from the freeholder or managing agent. The law gives them 15 working days to hand it over. Plenty of them take longer. This is one of the most common things that holds up leasehold purchases, and once the request has gone in, your conveyancer can chase but can't actually speed it up.

The pack costs money too — usually £100–£400, paid to the freeholder, not to your conveyancer.

What the lease says you can and can't do

Leases often have restrictions on subletting, keeping pets, making alterations. Your conveyancer should read the lease and call out anything that clashes with how you want to live there. Once you exchange, you're stuck with the lease terms unless you go through a formal process to change them, which costs.

What a competent leasehold conveyancer does

They check the lease length, the service charge history, the ground rent terms, any major works happening or planned, and any clauses that affect how you can use the place. Ask specifically whether there are any Section 20 notices in force. If your conveyancer isn't raising these things on their own, raise them yourself.