Millions of leaseholders paying a “second mortgage”, warn campaigners

Millions of flatowners are effectively paying a ‘double mortgage’, campaigners have revealed.

Katie Kendrick OBE, Founder of the National Leasehold Campaign, (pictured), suggests that as many as ‘five million’ leaseholders are trapped paying the huge sums of money.

The payments are for ‘spiralling’ service charges and insurance premiums, along with heavy ground rents on leasehold homes.

She said costs are soaring out of control, with many of the provisions of Government regulation – the Leasehold and Reform Act 2024 – still not in place to end this ‘national scandal’.

Kendrick exclusively told The Negotiator: “Leaseholders cannot wait any longer. They are living through a cost of living crisis within a cost of living crisis. Millions are being hammered by spiralling service charges, soaring insurance premiums and money-for-nothing ground rents that amount to a second mortgage.”

Millions are being hammered by spiralling service charges, soaring insurance premiums and money-for-nothing ground rents that amount to a second mortgage.”

She added: “Leaseholders are trapped in homes they cannot sell, cannot remortgage and are struggling to keep up.

“For some, the threat of losing their home is no longer a fear, it is a reality. This is a national scandal. Leaseholders have spent a decade warning governments that this would happen. Now we are at crisis point.

“The leasehold system is exploiting leaseholders, draining household finances and damaging the wider housing market. Leaseholders have waited long enough. Deliver leasehold reform now.”

Manifesto promise

Labour made a manifesto promise to “bring the feudal leasehold system to an end’ and has insisted that leasehold will no longer exist by the end of this Parliament.

However, Kendrick goes on to describe the reality for leaseholders today.

She said: “Many leaseholders regret buying their home. They were sold a dream and trapped in a nightmare.

“Leasehold is a blank cheque, impossible to budget for and designed to keep extracting more money year after year. It has become a cash cow for freeholders and managing agents, while ordinary families are left footing the bill.

“The greatest injustice is that leaseholders pay all the costs and carry all the risks of homeownership without ever truly owning their home.”

She concludes: “After paying a mortgage and what amounts to a second mortgage in service charges, insurance costs and ground rents, they still do not own the property. At the end of it all, they own a lease, a wasting asset that loses value over time.

“It is outrageous that in modern Britain people can pay for a home, be charged endlessly to live in it, and still not own it. This is a national scandal.”