Leasehold flat values fall 2.27% as freehold houses rise

Leasehold flats are experiencing negative price growth while freehold houses continue to appreciate, according to analysis of Land Registry data up to June 2026.

Flats and maisonettes represent the only property type in Britain recording a decline in value, falling 2.27% year-on-year to an average of £216,246. Over a five-year period, flat values have depreciated by 1.56%, while other property types have recorded double-digit equity growth.

The research, conducted by SAM Conveyancing, indicates that nearly nine in ten leasehold flats remain on the market for more than six months.

Freehold properties outperform

In contrast, freehold houses have recorded price increases across all categories. Semi-detached properties lead with a 3.16% year-on-year increase to an average of £285,618. Terraced houses rose 2.76% to £240,147, while detached homes increased 1.98% to £463,547.

Andrew Boast, Chief Executive of SAM Conveyancing, attributed the depreciation to mounting legal, legislative, and financial pressures on leaseholders. “We are seeing transactions stall on a daily basis because of delayed leasehold reforms and the sheer complexity of Building Safety Act compliance, ground rent clauses, lease terms and mortgagee protection clauses,” he said.

The issues affecting leasehold properties come as mortgage costs remain elevated, adding further pressure to the property market.

Lending criteria tightens

Boast noted that stricter lending criteria have compounded difficulties in the flat market. “Lenders are heavily scrutinising ground rent terms and insisting on strict mortgagee protection clauses,” he said. “When you combine this with aggressive freeholder controls, escalating service charges, and unresolved cladding liabilities, many flats are becoming borderline unmortgageable without significant legal remediation.”

The tightening of mortgage criteria follows broader concerns about property tenure and its influence on pricing across different market segments.

The divergence between leasehold and freehold property values reflects ongoing regulatory uncertainty and the financial burdens associated with flat ownership, creating a two-tier market where buyers increasingly favour the security of freehold houses over leasehold flats.

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