What to watch out for when buying a leasehold property

Leasehold is the dominant tenure for flats in England and Wales, and exists for some houses too (though new leasehold houses were largely banned under the Leasehold Reform (Ground Rent) Act 2022). Buying a leasehold property involves additional legal complexity that can affect the timeline, cost, and long-term value of the purchase.

Lease length

The remaining lease length is one of the most important things to check before proceeding. Most mortgage lenders require a minimum term after completion — typically 70 to 85 years. Below about 80 years, a lease is considered short, and extending it becomes more expensive because of how statutory extension rights are calculated.

If the lease has fewer than 80 years remaining, the cost of extending it should be factored into your offer price. Your conveyancer should flag this clearly.

Service charge and ground rent

The leasehold information pack from the freeholder or managing agent will include historical service charge accounts. Review these for large upcoming works — a roof replacement or major external repairs can result in a section 20 major works notice and a bill running to tens of thousands of pounds, potentially falling on you as the new owner.

Ground rent: since June 2022, new leases cannot charge a ground rent above a peppercorn (effectively zero). For older leases, check the ground rent review mechanism. Escalating ground rents — particularly those that double at fixed intervals — can affect mortgageability and resale value.

The management pack and why it causes delays

Your conveyancer must obtain a leasehold information pack (also called a management pack or LPE1 form) from the freeholder or managing agent. The law gives the freeholder 15 working days to respond. Many take longer. Chasing the pack is one of the most common sources of delay in leasehold transactions and is largely outside your conveyancer's control once the request has been made.

The pack also has a cost — typically £100 to £400 — which is paid to the freeholder, not the conveyancer.

Restricting rights and permissions

Leases often contain restrictions on what you can do with the property: subletting, keeping pets, making alterations. Your conveyancer should read the lease carefully and flag any restrictions that conflict with your intended use. These are not negotiable once you have exchanged — the lease terms are fixed unless you later apply to vary them.

What your conveyancer should do

A competent leasehold conveyancer will check lease length, service charge history, ground rent terms, any major works in progress or planned, and restrictions that affect your use. Ask specifically whether there are any section 20 notices in force. If your conveyancer does not raise these issues proactively, raise them yourself.