Leasehold investment
Buying flats or other leasehold interests, with their service charges and lease terms.
Professional analysis
Review unexpired term (lenders often want 70–85+ years at end of mortgage term), ground rent escalation, service charge history and reserve fund, major works, cladding/building safety (EWS1, leaseholder protections), subletting restrictions, and management company health.
Capital requirements
As buy-to-let, plus possible lease extension cost.
Cost assumptions to budget for
- Service charge and ground rent
- Major works contributions
- Lease extension premium if short
Potential returns
Net yield after service charges.
Main risks
- Short lease
- Escalating ground rents
- Building safety remediation
- Service charge increases
Legal checks
- Full lease review
- LPE1 management pack
Regulatory checks
- Leasehold reform under the Leasehold and Freehold Reform Act 2024 — check commencement
- Building Safety Act 2022 leaseholder protections
Is it suitable?
Often suits
- Investors who review leases carefully
Usually not suitable for
- Short leases without a plan to extend
A general guide, not a personal recommendation. Suitability depends on your finances, experience and attitude to risk.
Step-by-step
- Check tenure and lease length (Plotlumen report and title).
- Obtain the lease and management pack.
- Model service charges in the calculator.
- Take legal advice.
Financial calculations
Your offer or asking price.
Use local letting agents' valuations — not included in this report unless shown.
e.g. licensing, safety certificates
Default costs are assumptions for illustration — replace them with your own quotes. Stamp duty (£15,000) and refurbishment (£0) come from the other tabs.
After income tax (owned personally)
An estimate for one owner in England, Wales or Northern Ireland, assuming all the profit falls in the band you choose and ignoring carried-forward amounts. Companies pay corporation tax instead and can deduct interest. Check with an accountant.
Three scenarios
| Scenario | Cashflow / month | Net yield | Cash-on-cash |
|---|---|---|---|
| Conservative | £-1,124 | -0.13% | -16.73% |
| Expected | £-884 | -0.11% | -13.17% |
| Optimistic | £-804 | -0.10% | -11.97% |
Conservative: rent −10%, rate +1.5 points, 4 extra void weeks, running costs +20%, works +20%. Optimistic: rent +5%, rate −0.5 points, 1 fewer void week, running costs −10%, works −5%. These are projections from your inputs, not guaranteed returns.
Sensitivity: annual cashflow
| Rent | Rate -1% | Rate +0% | Rate +1% | Rate +2% |
|---|---|---|---|---|
| -10% | £-8,737 | £-10,612 | £-12,487 | £-14,362 |
| +0% | £-8,737 | £-10,612 | £-12,487 | £-14,362 |
| +10% | £-8,737 | £-10,612 | £-12,487 | £-14,362 |
Official sources
- Leasehold property (GOV.UK)
- The Leasehold Advisory Service (LEASE)
- Leasehold and Freehold Reform Act 2024 — commencement (GOV.UK search)
Last reviewed 31 Oct 2026. Rules change — check the source before relying on this guide.
Not advice