Freehold property premiums hit 205% across parts of the market

March 19, 2020

The latest research by lettings and estate agent Benham and Reeves, has found that the price premium paid by the nation’s homebuyers for a freehold home is as high as 205% across pockets of the property market.

Benham and Reeves looked at the difference in sold prices between leasehold and freehold property sales registered with the Land Registry over the last year.

The research shows that across the nation as a whole, a freehold home will set you back 10% more on average than a leasehold with an average sold price of £300,565 to £273,080.

When it comes to property type, the biggest premium paid is for a freehold terraced home, coming in at £242,902 for the average freehold, 53% more than the £158,675 paid for the average leasehold terraced house.

The freehold price premium for a detached or semi-detached home is currently 36% and 34% respectively, while flats are interestingly the only property type where the price paid for a freehold is lower, -16% cheaper than the price paid for a leasehold.

The biggest premiums can predictably be found within the capital where the average freehold secures 31% more than a leasehold property. However, over the last year in the borough of Camden, the average price paid for a freehold hit nearly £2.6m, 205% more than the £848,262 paid for a leasehold home.

This freehold premium was also at its highest in Kensington and Chelsea (196%), Westminster (134%) and Islington (127%).

Outside of London, Powys was home to the highest freehold premium (126%), followed by Surrey (110%) and West Sussex (98%).

Director of Benham and Reeves, Marc von Grundherr, commented:

“Freehold properties will always command a higher price due to the greater sense of security and ownership despite many leaseholds coming with a lifetime or more on the current lease but the extent of this premium is very much down to the length of a lease which can drastically impact price.

Of course, this demand for freehold homes was no doubt intensified in the wake of the leasehold scandal a few years back and so it comes as no surprise that the freehold price premium paid by homebuyers in the last year has hit as high as 205% in some parts of London.

However, if you do want to dodge the freehold house price premium, the figures show that a flat is the best investment and will see you pay less on average compared to leasehold flat.”

Property Type
Freehold
Leasehold
Freehold Premium
Average Price
£300,565
£273,080
10%
Transactions
78%
22%
N/A
Property Type
Freehold
Leasehold
Freehold Premium
Detached
£414,751
£305,146
36%
Flat
£248,844
£297,795
-16%
Semi-detached
£258,697
£192,632
34%
Terraced
£242,902
£158,675
53%
Borough
Freehold
Leasehold
Difference
CAMDEN
£2,585,103
£848,262
204.75%
KENSINGTON AND CHELSEA
£4,400,037
£1,487,784
196%
CITY OF WESTMINSTER
£3,316,637
£1,417,445
134%
ISLINGTON
£1,357,425
£596,909
127%
REDBRIDGE
£542,591
£265,521
104%
HAMMERSMITH AND FULHAM
£1,477,613
£724,164
104%
BARNET
£837,063
£428,188
95%
RICHMOND UPON THAMES
£1,009,812
£524,247
93%
HARINGEY
£888,179
£461,451
92%
BRENT
£776,462
£405,773
91%
MERTON
£771,608
£405,934
90%
SUTTON
£506,605
£270,485
87%
WANDSWORTH
£1,095,585
£599,307
83%
HACKNEY
£1,026,520
£568,001
81%
HAVERING
£432,009
£240,847
79%
ENFIELD
£543,436
£309,170
76%
BEXLEY
£405,484
£231,184
75%
EALING
£721,957
£412,874
75%
KINGSTON UPON THAMES
£693,976
£402,447
72%
HARROW
£604,633
£355,291
70%
LAMBETH
£914,879
£547,189
67%
HILLINGDON
£508,799
£308,174
65%
TOWER HAMLETS
£834,353
£513,179
63%
LEWISHAM
£590,254
£365,578
61%
HOUNSLOW
£591,660
£370,499
60%
BROMLEY
£573,485
£362,842
58%
CROYDON
£493,374
£327,648
51%
SOUTHWARK
£946,563
£639,616
48%
WALTHAM FOREST
£547,300
£373,958
46%
BARKING AND DAGENHAM
£340,591
£239,136
42%
GREENWICH
£521,630
£464,433
12%
NEWHAM
£417,285
£450,518
-7%
CITY OF LONDON
N/A
£1,070,092
N/A
County
Freehold
Leasehold
Difference
Powys
£205,887
£91,298
126%
Surrey
£612,384
£292,146
110%
West Sussex
£419,638
£212,026
98%
Herefordshire
£272,217
£137,939
97%
Leicestershire
£257,021
£131,506
95%
Hampshire
£392,915
£204,211
92%
East Sussex
£362,230
£192,146
89%
Dorset
£348,389
£186,969
86%
Bedfordshire
£318,251
£173,416
83%
Essex
£381,747
£209,881
82%
Berkshire
£469,924
£259,676
81%
Kent
£365,754
£203,331
80%
Nottinghamshire
£207,095
£116,070
78%
Northamptonshire
£262,633
£147,792
78%
Gloucestershire
£320,684
£181,007
77%
Norfolk
£265,344
£150,613
76%
Suffolk
£284,845
£162,115
76%
Buckinghamshire
£521,521
£296,928
76%
Hertfordshire
£523,738
£299,150
75%
Isle of Wight
£271,208
£156,330
73%
Oxfordshire
£431,566
£251,773
71%
Worcestershire
£279,187
£165,159
69%
Newport
£206,820
£122,421
69%
Rutland
£343,747
£204,761
68%
Blaenau Gwent
£105,819
£63,457
67%
Denbighshire
£172,839
£103,717
67%
Merthyr Tydfil
£121,484
£73,684
65%
Wiltshire
£328,761
£199,764
65%
Devon
£307,388
£189,062
63%
Cardiff
£260,596
£160,461
62%
Northumberland
£200,820
£124,302
62%
Carmarthenshire
£160,895
£100,025
61%
Lincolnshire
£206,904
£129,441
60%
Ceredigion
£206,333
£131,543
57%
Torfaen
£171,152
£109,182
57%
Monmouthshire
£294,862
£194,331
52%
The Vale of Glamorgan
£265,158
£176,116
51%
North Yorkshire
£263,725
£175,588
50%
Wrexham
£173,837
£117,327
48%
Gwynedd
£186,509
£127,192
47%
Cornwall
£279,841
£191,310
46%
Cambridgeshire
£354,278
£244,855
45%
Somerset
£276,562
£193,302
43%
Shropshire
£254,780
£181,373
40%
Pembrokeshire
£200,975
£146,084
38%
Cumbria
£197,613
£144,869
36%
Conwy
£195,721
£145,889
34%
West Midlands
£215,352
£161,658
33%
Merseyside
£177,083
£133,415
33%
West Yorkshire
£191,052
£144,043
33%
Lancashire
£190,618
£144,365
32%
Cheshire
£241,339
£184,524
32%
Caerphilly
£149,720
£113,430
32%
Greater Manchester
£222,699
£169,037
32%
City of Bristol
£344,493
£261,859
32%
Tyne and Wear
£175,409
£133,864
31%
Greater London
£702,330
£537,087
31%
Derbyshire
£208,393
£166,951
25%
Bridgend
£169,963
£139,544
22%
Swansea
£180,102
£148,688
21%
Flintshire
£182,348
£151,062
21%
Warwickshire
£301,183
£250,703
20%
Rhondda Cynon Taff
£125,134
£104,483
20%
Neath Port Talbot
£130,646
£115,348
13%
East Riding of Yorkshire
£210,772
£187,886
12%
Staffordshire
£226,788
£215,700
5%
Isle of Anglesey
£193,692
£185,112
5%
County Durham
£130,144
£127,406
2%
South Yorkshire
£163,722
£172,329
-5%

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