New research from LRG reveals that obstacles arising in leasehold structures are pushing landlords away from flats, limiting upgrades and lowering tenant confidence in how buildings are managed.
According to its latest Lettings Report, 58% of flats let by landlords are leasehold. Among these, 46% of landlords say their greatest challenge is dealing with service charges, coordinating communal repairs, or having no control over decisions.
These constraints are influencing investment decisions, the report says. Over one-third of landlords (34%) now say they actively avoid letting flats because of leasehold-related issues or the complexity of building management structures.
The report also reveals that 58% of landlords currently let at least one flat, but many are reconsidering their position. Without reform, the new report concludes, leasehold lettings could continue to decline which in turn would reduce the availability of affordable housing at a time when demand is already high.
With tenants, only 39% of those surveyed said they had confidence in how their building was managed. In addition, there is dissatisfaction in flats that is often linked to issues beyond the tenancy itself, particularly the way shared areas are maintained or controlled.
Half of landlords believe EPC rules should reflect whether leaseholders are legally able to make the necessary upgrades. This echoes concerns raised by Propertymark, which called leasehold restrictions a significant barrier to energy compliance in its consultation response.
Costs are a growing concern too. According to a UK Finance report in May 2025, the average cost of upgrading a property to EPC band C is around £6,800, rising significantly in older buildings and flats (UK Finance). For landlords in leasehold properties, those works often require permission from freeholders or managing agents, something that cannot be guaranteed.
The NRLA has also warned that the current government timeline to improve the energy performance of rental homes is unrealistic, particularly in properties where consent is needed for building-wide improvements.
Allison Thompson, national lettings managing director at LRG, commented: “Flats are a vital part of the rental market, particularly for first-time renters and young professionals. But many landlords are now telling us they simply cannot meet expectations in these properties because they do not control the wider building.
“This is not about unwillingness. It is about feasibility. Good landlords want to improve homes, but the leasehold structure often prevents meaningful action. Reform is essential if we are serious about raising standards and giving tenants the homes they expect.”
Read the orginal article: https://propertyindustryeye.com/new-report-leasehold-lettings-under-pressure/
