The Financial Conduct Authority (FCA) requires mortgage advisers like us to inform borrowers about foreseeable harm. We will do our best here, but if you want a leasehold property, seek professional guidance from a property conveyancing solicitor.

Here are the main dangers that can make a flat unmortgageable, unsellable or far more expensive than expected.

Short lease terms
Most lenders refuse mortgages on leases with fewer than 80–85 years left. Below 70 years, almost no lender will lend. As the lease shortens, the flat loses value fast and becomes harder to sell. Extending the lease later is possible but costly – especially once it drops below 80 years.

High or doubling ground rents
Many leases have ground rents that double every 10 or 15 years. Even modest starting rents can quickly become unaffordable. Lenders often reject applications if the ground rent is more than 0.1% of the flat’s value or has a doubling clause. This makes the property un-mortgageable and therefore sellable only to cash buyers.

Fire safety and ESW1 issues
After the Grenfell fire, lenders require proof that the building is safe. For many blocks (especially those with cladding), an EWS1 form or similar safety certificate is needed. If the form is missing, invalid, or shows problems, the flat is usually unmortgageable until costly repairs are done. Delays can last months or years and incur higher service charges for short-term risk mitigation.

Sky-high service charges
Service charges for maintenance, insurance and repairs have soared in many blocks. If charges exceed 1% of the flat’s value each year, lenders often refuse mortgages. The management earns money from managing maintenance; the freeholder does not care how they spend your money. Leaseholders have little to no say in repairs, contractors or costs, even though they pay the bills.

Forfeiture risk
Miss payments on ground rent or service charges, and the freeholder can take back the lease. This wipes out the lender’s security, so banks treat it as a big risk.

Hidden costs and restrictions
Leaseholders often face high fees for simple changes – such as subletting, making alterations or even selling. Major works bills can arrive without warning, and challenging unfair charges is slow and expensive.

Harder to sell or remortgage
All the above problems shrink the pool of buyers. Many flats become “toxic” on the market, leaving owners stuck even if they want to move or release equity.

What to do
Always check the lease length, ground rent, service charges and fire safety status before you make an offer. A specialist mortgage adviser can tell you quickly which lenders will lend and which will not. When possible, choose a freehold house or a new-build flat with better lease terms.

Buying a leasehold flat can still work – but only if you understand the dangers first.

Leasehold Reform

#Leasehold can turn your dream home into a financial trap. Short leases, doubling ground rents, soaring service charges & unmortgageable properties are real risks. https://t.co/eYMLhN8C5j #LeaseholdScandal #AbolishLeasehold #EndLeasehold #LeaseholdReform pic.twitter.com/pPGlVvJso7

— Cyborg Finance (@CyborgFinance) April 7, 2026

Michael Gove and the Conservatives promised but underdelivered, Keir Starmer and Labour promised but has so far underdelivered, and London Mayor Sadiq Khan promised but is still funding leasehold new builds. Reforming these issues is an uphill struggle.

The National Leasehold Campaign are the largest grassroots campaign group fighting to end the leasehold system. The ultimate aim is to ABOLISH residential Leasehold and make Commonhold Mandatory.

The Leasehold Advisory Service (LEASE) is a government-funded, independent body that provides free advice on residential leasehold in England and Wales. The advisers are legally qualified and offer clear, impartial guidance to help people understand their rights and responsibilities. They advise existing leaseholders and people considering buying a leasehold. Free Leaseholders campaigns for every leaseholder to have control over how their homes are managed to be freed from the threat of forfeiture and crippling costs.

Legislation

Recent enacted reforms

• 31 January 2025 – Leasehold and Freehold Reform Act 2024
  Removed the old “two-year ownership rule”. Leaseholders can now extend their lease or buy the freehold as soon as they own the property.

• 3 March 2025 – Leasehold and Freehold Reform Act 2024
  Made Right to Manage easier: more mixed-use buildings now qualify, and leaseholders no longer have to pay the freeholder’s legal costs when claiming it.

Proposed Labour reforms (not yet enacted)

• Draft Commonhold and Leasehold Reform Bill (published 27 January 2026)
  Caps ground rent on existing leases at £250 a year, then reduces it to peppercorn after 40 years (target start date late 2028). Bans new leasehold flats and makes commonhold the default for new flats.

• Commonhold White Paper (published 3 March 2025)
  Sets out plans to expand commonhold (true ownership with no freeholder) and eventually replace the leasehold system for flats. Still at the consultation/draft stage.

Most of the bigger changes in the 2024 Act (cheaper lease extensions, service charge reforms, etc.) are still waiting for further regulations and have been partly overtaken by the new 2026 draft Bill. Full impact of the latest proposals is expected to take until 2028 or later.

Speak to a mortgage adviser if you’re buying or selling – some changes already help lending, while others are still on the horizon.

#Leasehold can turn your dream home into a financial trap. Short leases, doubling ground rents, soaring service charges & unmortgageable properties are real risks. https://t.co/eYMLhN8C5j #LeaseholdScandal #AbolishLeasehold #EndLeasehold #LeaseholdReform pic.twitter.com/pPGlVvJso7

— Cyborg Finance (@CyborgFinance) April 7, 2026