London continues to lead leasehold property market
Research by Warwick Estates reveals that the total value of new-build leasehold transactions is 50% higher than new-build freehold transactions as flats and urban living dominate England’s market.
In the first six months of 2021, there were 1,523 new-build transactions in England. Of these, 44.8% (683) were freehold homes while 55.2% (840) were leaseholds, demonstrating a fairly even split for England’s market.
However, the slight lead that leasehold properties have is very much helped by London’s new-build market which has seen just two freehold transactions from a total of 475 in 2022 so far. This means that 99.6% of the capital’s new-build sales have been leasehold contracts. This is, of course, due to the overwhelming prevalence of flats instead of houses.
However, leaseholds also prove the more popular choice in the South West (63.1%) and South East (52.6%).
When studying the average (median) price of freeholds vs leaseholds, leaseholds once again come out on top.
The average price of a freehold is £307,995, while a new-build leasehold costs 25.9% more at £415,626. Once again, however, this stat is being heavily influenced by London’s new-build market and its top-heavy dominance of leaseholds pushing the national leasehold value up.
If London is removed from the data, the average price of a new-build leasehold is £265,000, while the average for a freehold is 16% higher at £307,500.
Regardless of how the data is analysed, the overall sales value of all new-builds in England across this time period is £691m.
London is delivering the biggest slice of this with sales totalling £353m, followed by the South East’s contribution of £107m.
Due to the dominance of leaseholds, they contribute £458m to the national total, 49.1% more than the freehold total of £233m.
