How freeholders are manipulating government data to block reforms

By Alexander Hamilton

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Dr. Alexander Hamilton is an economic adviser and development economist at the UK’s FCDO, where he specialises in the economies of the Middle East and North Africa.  He writes on the economics of leasehold in a private capacity. The views in this article are his own, and do not necessarily reflect those of the FCDO or the UK government. His scholarly work can be found here: Alexander Hamilton – Google Scholar‬‬‬‬‬‬.

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Selective data from the recently released MHCLG statistics on Leasehold Dwellings (2024/25) has been used by some outlets and lobby groups to argue that the rationale for the government’s leasehold reform agenda should be reconsidered. As one outlet noted:

‘The government’s leasehold reform agenda is facing renewed scrutiny following the publication of new data from the English Housing Survey showing 93% of leaseholders living in flats are satisfied with their tenure….Separate economic analysis commissioned by the sector estimates the proposals could remove approximately £18.7 billion in ground rent investment value…The Residential Freehold Association (RFA) has cited the satisfaction data in calling for a reconsideration of the Commonhold and Leasehold Reform Bill…Natalie Chambers, director of the RFA, said: “At long last, the government has actually asked leaseholders what they think about the leasehold tenure and the answer they have given shows significant and widespread satisfaction… Abolishing a system which 93% of respondents are satisfied with and forcing people into an unknown and untested commonhold system could be one of the biggest own goals in the history of housing policy.”’

Do the results of Leasehold Dwellings (2024/25) support this claim? To answer that question, we first need to be clear about what is being tested. For most stakeholders, the relevant policy issue is whether moving away from the traditional leasehold model—where a third-party landlord appoints the managing agent, ground rents are payable, and occupation is held through a time-limited lease—is associated with better outcomes for residents. Using that definition, the new survey can help assess whether shifts away from this legal regime appear to coincide with higher reported wellbeing.

If leasehold reform is beneficial, we would expect departures from the traditional leaseholder–freeholder model to be associated with higher self-reported satisfaction. In particular, satisfaction among leaseholders should tend to increase as:

1. The remaining term on the lease increases.
2. Ground rents are lower.
3. Control over service charges is exercised through an RTM or RMC.
4. A share of freehold is owned in the case of flats.

f satisfaction rises in this way, that would be consistent with the case for leasehold reform to the extent that self-reported satisfaction is a reasonable, if imperfect, proxy for welfare. However, this is not the only justification for reform. As already documented elsewhere (see: here), leasehold may also impose wider social costs by embedding misaligned incentives in the governance of buildings and by diverting investment toward ground-rent income rather than more productive ventures.

Using this framework, we can examine the claim that ‘93% of leaseholders are satisfied with their tenure type’. On a casual reading, that appears to suggest that most leaseholders are content with the traditional third-party landlord model. But the basis for the figure is less clear than that wording implies. In the survey, ‘tenure type’ refers to whether a respondent is an owner occupier, private renter, and so on (see: here). It does not itself distinguish between leasehold and freehold title, although the data do separately identify whether respondents live in leasehold or freehold properties. The most plausible source of the statistic is therefore the question asking how satisfied respondents are with their accommodation, which is disaggregated both by tenure type and by leasehold/freehold status. That is the measure used in the analysis below. Indeed, Table AT7 (see: here – accessed 22/05/2026), which disaggregates satisfaction with accommodation by tenure and leasehold/freehold status, is likely the source of the 93% figure, since adding together leasehold respondents who are very satisfied, fairly satisfied, or neither satisfied nor dissatisfied yields a response of 92.3%.

1: Does ‘satisfaction with your accommodation’ measure satisfaction with leasehold?

The first question we should ask is whether responses to ‘how satisfied are you with your accommodation?’ really capture what respondents think about the leasehold system. Many people may interpret this more broadly, focusing on the physical qualities of their home rather than its legal title. The Competition and Markets Authority has already shown that many leaseholders were not given adequate information about the implications of leasehold when they bought their property (see: here). As a result, some may not recognise a problem until they face a ground rent review, remortgage, or attempted sale. The survey question therefore may not be measuring only, or even primarily, satisfaction with the legal framework of the property itself.

The same caution is supported by evidence from questions that ask more directly about leasehold. For example, the previous English House Survey 2023/24 found that 1 in 4 leaseholders (24%) had considered making a complaint to a management agent or freeholder in the previous twelve months, rising to 1 in 3 (34%) among leaseholders in flats. Meanwhile, 4 in 10 leaseholders (43%) said that their leasehold purchase had affected their plans to start a family, while 6 in 10 (58%) reported wider adverse effects (see: Opinium poll here). Finally, almost 6 in 10 (58%) reported that their ability to sell their homes had been hampered by onerous clauses and maintenance costs (see: Opinium poll analysed by the [MISSING WORD OR WORDS] here). Taken together, these responses suggest that when people are asked more directly about the effects of leasehold, views are often less positive than the accommodation question might imply. At most, the accommodation question is therefore a noisy proxy for attitudes to leasehold as a system.

2: Share of freehold flats are included in the leasehold total

A second issue is that the leasehold total includes flats held with a share of freehold. In these cases, the flat owner remains a leaseholder with a lease, but also jointly owns the freehold (where the building consists of up to four units) or owns a share in the company that owns the freehold. As a result, a share-of-freehold building will contain both a freehold title and multiple leasehold titles in its Land Registry records. As noted in the Technical notes to the survey, where a building has ‘one or more leasehold titles registered…[it is] categorised as leasehold.’ According to the previous English Housing Survey 2023/24, 20% of leaseholders live in a building where the freehold is owned by leaseholders. That means headline figures on leaseholder satisfaction include a substantial group who do not have a third-party landlord at all.

The survey does allow a comparison between leasehold and freehold houses only. However, because most leasehold properties are flats, and because flats may generate distinctive leasehold-related issues, any attempt to use the overall survey results to argue that leasehold is working well must reckon with the fact that a significant minority of leasehold respondents do not have a third-party landlord.

3: No Right to Manage (RTM) or Residential Management Company (RMC) disaggregation for leaseholders is available

A related problem is that the data do not disaggregate leaseholders according to whether they exercise effective control over building management through the Right to Manage or through a Residential Management Company. This matters because control over service charges is a major departure from the traditional leasehold-freehold model. According to LAFRA’s Impact Assessment, there were just over 8,200 active RTM companies in 2023, although there is no similarly good data on the number of RMCs. Again, this makes the headline statement potentially misleading. The survey’s leasehold category includes leaseholders with a share of freehold and leaseholders who have partly displaced landlord control through an RTM or RMC. We can again focus on houses only, but that still leaves us unable to compare leasehold flats with and without RTM/RMC arrangements.

4: Leaseholders are still less satisfied than freehold owners

Even if we set aside the fact that the leasehold category groups together forms of leasehold with very different degrees of control, there is a further problem with the headline statistic. To assess whether the survey evidence supports leasehold reform, we need a comparator that more closely approximates the direction of reform. Fortunately, the MHCLG dataset allows a comparison of satisfaction with accommodation, disaggregated by leasehold and freehold ownership (see: here). The table below reproduces those data on satisfaction by legal title.

The table above shows how the ‘93% of leaseholders are satisfied’ figure may have been constructed: by adding together leasehold respondents who are very satisfied, fairly satisfied, or neither satisfied nor dissatisfied with their accommodation, giving 92.3%. But the same table also indicates that, relative to freehold owners, leaseholders are less likely to be very satisfied and more likely to report dissatisfaction with their accommodation. The gap appears modest in absolute terms, but it points in the opposite direction from the claim that leasehold is performing better.

Given the classification issues discussed above, it is also useful to compare leasehold and freehold houses only, since this provides a more homogeneous comparator group. While this does not solve every problem, it helps isolate the difference between leasehold and freehold title among a more homogeneous group of respondents.

This second table points in the same direction. Although house owners report higher satisfaction overall than flat owners, freehold house owners still appear somewhat more satisfied with their accommodation than their counterparts in leasehold houses. This does not by itself establish a causal effect of tenure, but it is consistent with the broader pattern in the survey data.

5: Even modest improvements in subjective welfare from switching from leasehold to freehold may generate large monetary benefits

The survey evidence discussed above suggests a consistent pattern: even on a headline reading of the English Housing Survey, leaseholders are less likely to report being “very satisfied” and more likely to report dissatisfaction than freeholders, despite definitional issues that tend to blur these distinctions. To move beyond descriptive statistics, the next step is to translate these differences in reported satisfaction into an indicative estimate of welfare impact using the UK Government’s Wellbeing Valuation Framework. This approach is based on HM Treasury’s Green Book, which recognises that subjective wellbeing data can be used to value non-market outcomes where impacts are not captured in prices (see: here). In practical terms, the five-point satisfaction scale (from “very satisfied” to “very dissatisfied”) is treated as an ordered numerical scale, allowing average satisfaction levels to be compared across leasehold and freehold types in a consistent and transparent way (see: here). The results should be read as illustrative rather than definitive.

The first step is to interpret what a difference in housing satisfaction may mean in terms of overall wellbeing. A large body of UK evidence, including analysis by the Office for National Statistics (ONS) using nationally representative survey data, finds that domain-specific satisfaction (such as housing satisfaction) is a strong predictor of overall life satisfaction, even after controlling for income and other factors (see: here). These studies typically find that a one-point increase on a five-point satisfaction scale is associated with around 0.2 to 0.4 points higher life satisfaction (on a 0–10 scale) (see: here, p.10). Using the survey data above, the average satisfaction score is 3.24 for leasehold and 3.37 for freehold, implying a gap of approximately 0.13–0.14 points. Applying a central estimate of 0.3 to this gap suggests an increase of around 0.04 life satisfaction points per person per year, although this depends on the assumed mapping from housing satisfaction to life satisfaction. This provides a transparent way of interpreting what would otherwise remain an abstract difference in survey responses.

Finally, following HM Treasury supplementary guidance, changes in life satisfaction can be expressed in monetary terms using standard wellbeing values (WELLBYs). Central government guidance typically values one WELLBY at around £13,000 in 2019 prices, reflecting a midpoint of the recommended range used in appraisal (see: here). Consistent with Green Book practice, this value should be updated to reflect current prices. Applying standard UK inflation adjustments (approximately 25% cumulative inflation between 2019 and 2025) implies a current value of roughly £16,000 per WELLBY, with a corresponding range of approximately £12,500–£18,500. On this basis, the observed difference in satisfaction between leasehold and freehold—equivalent to around 0.04 WELLBYs per person per year—would translate into approximately £600–£650 per person per year, with a wider sensitivity range of approximately £400–£900. Under a simplifying assumption of two persons per household, this implies a central estimate of approximately £1,280 per household per year.

This should be understood as a rudimentary indicative exercise rather than a full appraisal: a more comprehensive analysis would ideally use microdata, explicitly model uncertainty and heterogeneity across leaseholders, and incorporate a wider set of costs and benefits before drawing firm conclusions.

We can now calculate the welfare effects of shifting all leasehold properties to freehold. Given that the average household size in England is 2.2 people (see: here), a simplifying assumption of 2.0 persons per household is applied to the 4.9 million leasehold dwellings (see: here). Furthermore, consistent with standard appraisal practice, the benefits from improved subjective wellbeing are modelled over a 10-year time horizon, using an annual discount rate of 3.5% (see: here).

Applying the central estimate of approximately £1,280 per household per year yields a present value of around £10,650 per household, or approximately £52.2 billion in aggregate over a 10‑year period. These figures are illustrative and depend on the assumptions set out above. To take a deliberately conservative view, halving this to £640 per household per year would reduce the aggregate estimate to approximately £26 billion.

To put this into perspective, the central illustrative estimate is larger than the losses cited in relation to proposed leasehold reforms: it is around three times larger than the £18.7 billion that some industry‑commissioned analysis claims will be lost if the Leasehold and Commonhold Reform Bill caps ground rents at £250 for 40 years, and approximately four to five times larger than the £10.0–£12.7 billion range estimated by government. While this analysis is necessarily simplified, it is worth noting that it captures only one channel of welfare gain (subjective wellbeing) and does not monetise the wider economic and institutional benefits of abolishing leasehold documented elsewhere (see:  here).

Sensitivity analysis indicates that the results are robust to alternative parameter choices. Under a conservative scenario adopting a lower domain‑to‑life satisfaction coefficient (0.2) combined with a lower WELLBY value (£12,500), the implied benefit is approximately £675 per household per year, corresponding to a present value of around £5,600 per household and approximately £27.5 billion in aggregate. Under a higher‑impact scenario using a coefficient of 0.4 and a WELLBY value of £18,500, the implied benefit rises to approximately £2,000 per household per year, corresponding to a present value of around £16,600 per household and approximately £81 billion in aggregate.

To assess the overall economic case for reform, the table below compares the estimated NPV wellbeing gains under low, central, and high scenarios with the government’s central NPV cost estimate for capping ground rents at £250 for 40 years, showing the resulting net welfare impact over a ten-year period.

The table shows that, across all scenarios, the estimated wellbeing gains exceed the government’s central cost estimate, implying a positive net welfare impact ranging from approximately £15 billion to £70 billion over a ten-year period. This suggests that the welfare benefits of reform may extend beyond the effects of capping ground rents alone. Taken at face value, these estimates provide an economic rationale for timely implementation of LAFRA and the remaining Law Commission recommendations to facilitate conversion to commonhold—particularly reforms relating to development value and the setting of deferment rates. That said, those wider policy choices would ideally be informed by a fuller appraisal than the indicative exercise presented here.

Of course, because this is only a basic analysis, and, as noted at the beginning of this piece, satisfaction with accommodation is likely to be measuring factors beyond leasehold/freehold legal titles, the shift from leasehold to freehold may generate lower returns than the estimates calculated above. Still, even if only a small part of this uplift is attributable to the legal title of the property, the welfare gains could still be significant. Combined with the other, non-wellness benefits of leasehold reform not discussed here, this basic analysis does point to at least one more plausible reason why leasehold reform is economically justifiable.

Conclusion

The claim that the 2024–25 English Housing Survey shows overwhelming satisfaction with the traditional third-party landlord model of leasehold is difficult to sustain once the underlying categories are unpacked. First, the survey’s leasehold category includes a significant proportion of dwellings with a share of freehold and an unspecified proportion in which landlord control over service charges has been reduced through RTM or RMC arrangements. Second, the survey question used here measures satisfaction with accommodation, not satisfaction with leasehold itself. When respondents are asked more directly about leasehold, the available evidence appears markedly less positive. Third, when the survey data are compared with the most relevant alternative ownership model available in the dataset, freehold owners report higher satisfaction than leaseholders. That difference is not large, but across 4.9 million leasehold dwellings even modest differences in subjective wellbeing may still matter economically. Using standard wellbeing valuation methods, the indicative exercise above suggests that the welfare gains from moving current leaseholders toward freehold/commonhold could be substantial relative to the estimated costs of reform. A fuller appraisal would be preferable, but the available evidence appears more consistent with the case for reform than with the claim that the survey undermines it.