Leasehold property sales are driving activity in these areas of the property market
UK's Property Market Is Driven By Leasehold Home Sales
Research from Warwick Estates has revealed the areas of England where leasehold home sales are driving the property market, accounting for as much as 99% of transactions.
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Warwick Estates analysed property transactions across England to have completed over the last year, highlighting which pockets of the market are home to the highest number of leasehold homes as a percentage of all transactions.
While leasehold homes have come under fire in recent years, previous research from Warwick Estates shows that they offer a foot on the ladder for as much as a third less than freehold properties. They also provide the added benefit of a more hands-off approach to homeownership, with the freeholder responsible for building maintenance within the communal areas, as well as the wider structural maintenance of the building and the provision of building insurance.
Leaseholds do have their complexities in the eyes of some homebuyers, particularly those looking to put down a firmer foundation for the long-term. You often need permission from the freeholder to make any changes to the property, you might not be allowed pets, or to sub-let, and you also need to be aware of how many years remain on the lease as renewing it will incur a charge.
However, leasehold homes do prove very popular in some parts of the property market. At a regional level, leasehold transactions accounted for half (47%) of all homes sold in London in the last 12 months.
The capital also accounts for the top 10 leasehold homebuyer hotspots, with the City of London seeing leaseholds account for 99% of all homes sold in the last year.
Tower Hamlets (91%), Westminster (85%), Camden (80%), Hackney (80%), Islington (77%), Kensington and Chelsea (75%), Lambeth (72%), Hammersmith and Fulham (70%) and Southwark (69%) have also seen the most leasehold sales as a percentage of all transactions.
But it’s not just London where leasehold homes have proved popular. Outside of the capital, Oldham has seen 67% of all transactions come via leasehold home sales. Other areas to rank with a high number of leasehold transactions include Bolton (65%), Hyndburn (62%), Bury and Burnley (61%).
Leaseholds Aren't For Everyone, But Are Popular
COO of Warwick Estates, Emma Power, commented:
“The choice between a leasehold or a freehold will be part of a buyer’s designated criteria when searching the market, much like the decision to buy near a good school or to opt for a larger home.
Leaseholds aren’t for everyone due to their more complex nature. That said, our research shows that leaseholds have proven incredibly popular in many pockets of the property market, accounting for half or more of all transactions in many areas.
Leasehold homes certainly suit a certain kind of lifestyle, providing a less hands-on approach to homeownership with the freeholder responsible for the general upkeep of the building. We’ve also seen the communal aspect that comes with leasehold living grow in popularity as a result of lockdown, allowing homebuyers a certain degree of normality and interaction without breaching lockdown restrictions.
They also offer a far more affordable foot on the ladder in many cases and so we expect leasehold homes to continue to provide a substantial level of housing to the nation’s homebuyers.”