Leasehold restrictions are deterring landlords from buying and improving flats, with nearly half reporting that service charges, communal repair delays and lack of decision-making power are their biggest barriers, according to new research from Leaders Romans Group (LRG). The findings raise concerns for the supply of rental homes, especially in city centres.
Service charges and control issues hitting investment confidence
LRG’s national survey found that 46% of leasehold flat landlords cite high or unpredictable service charges, difficulties coordinating building repairs, and zero say over management decisions as their main operational headache. More than a third (34%) now avoid letting flats entirely because of these structural limitations.
Allison Thompson, national lettings managing director at LRG, said: “Flats are a vital part of the rental market, particularly for first-time renters and young professionals. But many landlords are 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.”
Leasehold blocks hindering property improvements
The research suggests that leasehold structures are also obstructing landlords from carrying out upgrades to boost energy efficiency, with half saying EPC targets should reflect whether they are legally able to make the necessary changes. The issue is especially acute in older blocks where improvements to insulation, glazing or heating systems require freeholder consent.
Thompson warned: “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.”
Property bodies call for reform before new rules bite
Trade body Propertymark has echoed these concerns, calling leasehold restrictions a “significant barrier” to compliance with upcoming government energy efficiency rules. In its recent consultation response, it argued that leasehold landlords should not face penalties for failing to make upgrades that freeholders block.
Mark Davidson, a Manchester landlord who owns two leasehold flats, told us: “I’ve been trying to get double glazing approved for over a year. The freeholder’s management company keeps delaying decisions, and in the meantime my EPC rating stays stuck at D. If I were buying today, I’d stick to freehold houses—less stress and more control.”
Editor’s view
Leasehold reform has long been a political talking point, but these figures suggest the issue is becoming an active driver of disinvestment in the rental sector. Without giving landlords more control over their assets—or at least protection from non-cooperative freeholders—government targets on standards and energy efficiency risk becoming paper promises. The question is whether ministers will act before more landlords walk away from flats altogether.
