Stuck with an unsellable leasehold flat? If you own your home, equity release could give you options

The leasehold flat selling crisis in 2026

The problems facing owners of leasehold flats in England and Wales have compounded steadily since the Grenfell Tower fire in 2017. EWS1 (External Wall System) assessments — required by mortgage lenders before they will lend on higher-risk buildings — have created a two-tier market in which flats in affected buildings either cannot be sold at all, or can only be sold to cash buyers at a significant discount.

The Building Safety Act 2022 created legal routes for leaseholders to pursue remediation costs from developers and building owners — but the process is slow, contested, and far from complete. Many leaseholders remain in limbo: unable to sell, facing large service charge bills for interim safety measures, and uncertain about when or whether their building will be certified safe.

Beyond cladding, the Leasehold and Freehold Reform Act 2024 has introduced changes to ground rent, enfranchisement rights, and lease extension processes — but has also created uncertainty about pricing and process during the transition period. Buyers of leasehold flats are cautious, and the market for flats with short leases or complex management arrangements has contracted significantly.

For older landlords — many of whom bought buy-to-let flats in the 1990s or 2000s as a retirement income strategy — this has created a trap: the asset they planned to sell to fund retirement is stuck, and the Renters' Rights Act 2025 has simultaneously increased the cost and complexity of continuing to let it.

How equity release on your primary home could help

If you own your own home and have significant equity in it, a lifetime mortgage could release funds that address the financial pressure created by an unsellable or poorly-performing buy-to-let flat — without requiring you to sell the flat at a distressed price.

Potential uses of equity release in this situation include:

• Supplementing retirement income. If the buy-to-let was providing rental income that has been eroded by increased costs — maintenance, mortgage, service charges, compliance — equity release could bridge the income gap while you work out a longer-term exit strategy for the rental property.
• Covering the costs of remediation contributions. Where a landlord is required to contribute to building safety remediation works, equity release on the primary home could fund those contributions — allowing the remediation to proceed and the flat to ultimately become sellable.
• Removing financial pressure to sell at a loss. Releasing equity from your home reduces the urgency of selling the flat at whatever price the market currently offers. If remediation is progressing, waiting may be financially better than selling now — and equity release can make waiting viable.
• Funding a lease extension. If the leasehold flat has a short lease, extending it (at a cost) could restore its saleability. Equity release could fund the lease extension premium.

Equity release on your primary home is entirely separate from the buy-to-let property — lenders are not concerned with your other assets or liabilities, only with your primary residence and your income. The buy-to-let complicates the overall financial picture but does not in itself prevent equity release on a qualifying primary residence.

Important considerations and the need for specialist advice

Using equity release to manage financial pressure arising from a buy-to-let property is a more complex situation than straightforward retirement income supplementation, and it requires careful assessment:

• The overall financial position — including any mortgage or outstanding costs on the buy-to-let — needs to be understood before a recommendation is made.
• Tax implications of the buy-to-let (rental income, capital gains tax on eventual sale) need to be factored into the plan.
• The long-term exit strategy for the rental property needs to be considered alongside the equity release arrangement.
• If there is a mortgage on the primary residence, this would need to be addressed as part of the equity release process.

A Verity Home adviser can assess the property side of this picture and work alongside your accountant or financial adviser to ensure the full plan is coherent. The initial consultation is free and carries no obligation.