Propertymark’s report also found that short leases could prevent sales and, where a home had 80 years or less remaining, the cost to extend it could be more than £10,000.
Meanwhile, safety issues such as cladding have also added to costs by raising insurance premiums and legal fees.
In some cases, lenders had refused to mortgage properties the safety risks were too great, Propertymark said.
There were an estimated 4.9 million leasehold properties in 2024-25, about two-thirds of which were flats, according to the latest data.
Aneisha Beveridge, of estate agents Hamptons, said higher mortgage rates since 2022 had made buyers more sensitive to the additional costs and risks that often came with leasehold ownership.
She said: “Leasehold homes are taking an average of a month longer to sell than freehold properties and are more likely to fall through.”
She added: “Well-managed flats in good locations still attract demand, but buyers have become much less willing to overlook high service charges or uncertainty over future costs.”
Propertymark also surveyed 1,200 leaseholders and found that 86pc of those who paid a service charge said it had increased over the past 24 months. Of those, almost two-thirds said it had increased by more than 21pc.
Meanwhile, 53pc of leaseholders said ground rent had significantly affected their ability to sell their property.
Ground rent for new long residential leases was banned in 2022, yet it still costs millions of existing leaseholders hundreds of pounds a year. Many mortgage providers also refuse to lend if the ground rent is more than a certain percentage of the property price.
Leaseholders are still waiting for the Commonhold and Leasehold Reform Bill, which would end the current system and replace it with “commonhold”. This would give buyers stronger protection against unreasonable service charges when the reforms come into effect next year.
Adam Jennings, of estate agents Chestertons, said: “Well-priced leasehold properties with sensible ongoing costs and a clear lease position continue to attract interest from buyers.
“Purchasers are taking more time to consider the detail, with service charges, lease length and the wider terms of the lease increasingly forming part of the conversation.”
