I’ve been stuck unable to sell my leasehold flat for eight years – it’s like prison

Stacey Lofthouse has been trapped in a flat she hasn’t been able to sell for eight years – and says she would part with it for as little as £1 if she could. Stacey, from Lancaster, Lancashire, bought her two-bed flat with her husband in 2009 for £150,000. The property first went up for sale in 2018 and had a number of viewings, but after an inspection, the building the flat is in was classed as having high-risk cladding, causing the process to stall. Shorts She said: “We have sold it five times now and they have all fallen through due to the cladding.” In October 2022, Stacey hoped there was a light at the end of the tunnel when the cladding was reassessed, and it turned out the original classification was incorrect. But despite the cladding now not being an issue, Stacey still cannot sell due to the high ground rent and service charge her flat has. When she first moved in it was £295 a year, with the ground rent going up by £295 every ten years, meaning Stacey now pays £590. Another rise is due in January when it will cost £885 a year. Stacey said: “We have a son and a daughter who share a bedroom, but my son will be 10 this year, so that is going to have to change. “My husband and I will have to move into the front room, and my husband works nights, so I don’t know how that is going to work.” Lenders tend to not lend on properties that have ground rent over £250 a year or a doubling clause – meaning many interested buyers can’t get a mortgage on Stacey’s flat. Her service charge is also high at nearly £2,200 a year. Many mainstream mortgage lenders now set a strict limit where annual property service charges must not exceed 1 per cent of the property’s value. She added: “We’re just stuck here – we have tried everything.” Stacey put her house up for auction in May last year – with a starting price of £120,000 – for three months before taking it off after receiving no bids and recently reduced the asking price to £125,000. “I would sell it for a £1 if I could just pay my mortgage and get out but I can’t. It’s like being in prison. There is no option for us now,” she admitted. The family looked to rent their flat out but are unable to get accepted for a buy-to-let mortgage because they do not have enough equity in the flat. Many lenders require around 25 per cent equity in a property for a buy-to-let mortgage. If you don’t have this you sometimes need to make up the shortfall in cash. Stacey explained: “We bought the flat on the Help To Buy scheme and we had to remortgage a few years ago to be able to pay that off, so we have no equity in the flat.” The Help to Buy scheme was designed to help first-time buyers buy a property with just a 5 per cent deposit. The government would give you a loan between 5 per cent to 20 per cent of the cost of a new-build home as an ‘equity loan’. In London, this was up to 40 per cent with the loan being interest-free for five years. However, some homeowners have been struggling to sell their homes because they need to pay back the equity loan they took out to buy it. On top of this, if a property has been valued at less than what the person paid, they’ll repay the same percentage of the current property’s value when the loan was taken out. Stacey said: “Buying on the help to buy scheme was the biggest mistake I have ever made. We were young and naive and didn’t understand. We had a really small deposit and we wanted to be on the housing ladder, but I really wish we hadn’t done any of it.” Millions of leaseholders across England and Wales will have their ground rents capped at £250 a year from 2028, Sir Keir Starmer announced in January. Other key measures include a ban on the sale of new leasehold homes and a gradual transition to a “commonhold system”, which means there will be no freehold landlords. There are no plans to cap service charges; however, some campaigners are unhappy with this.