Half of UK adults are worried about the current leasehold-freehold system of owning property, according to a new survey by the HomeOwners Alliance (HOA).
The 2017 Homeowners Survey, an annual study by HOA and BLP Insurance, found that 50% of those polled see leasehold issues including service charges and ground rents as a very serious or serious problem – up from 42% last year.
Paula Higgins, HOA’s chief executive, says: “Unscrupulous players within the industry have turned what has been a form of tenure for centuries into a money-grabbing scheme that has left thousands of buyers across the country trapped in properties that are now essentially unsaleable.”
She adds that leasehold houses, doubling of ground rents and unfair clauses are leaving homeowners in a “nightmare situation”.
First-time buyers face greater pressures
The survey also reveals that there has been a significant drop in the number of people aspiring to own their own home. While in 2016, 73%% of non-homeowners dreamed of homeownership, the numbers have dropped to 71% in 2017. This equates to around 253,166 people in the UK.
Some 86% of would-be homeowners point to affordability issues due to rising house prices as the main barrier to homeownership – up by 3% on last year.
Saving for a deposit and lack of supply are the most pressing issues, with 86% of would-be first-time buyers saying rising house prices worry them most, 85% worrying about saving for a deposit and 80% anxious about the availability of housing.
HOA points out that while average earnings have increased 2.6% annually, average property price growth of 4.5% has out-paced this.
On a more positive note, rising house prices means that people are less worried about negative equity. Some 42% of those polled were concerned about the market value of a property falling below the outstanding amount of a mortgage secured on it. This is down from 44% last year, 49% in 2015 and 64% in 2014.