Leasehold scandal pushes freehold house price premiums to an 8 year high

September 27, 2019

Research by letting and estate agent, Benham and Reeves, has found that the price premium being paid for a freehold property by homebuyers in England and Wales is at its highest since 2011.

Using property transaction data, Benham and Reeves found that the price gap between a leasehold and freehold property was 14.3% in 2011, dropping consistently year on year to just 5% in 2014.

It then increased to 6.9% in 2015 and stayed at around this level before increasing last year in the wake of the leasehold scandal. So far in 2019, the gap has widened from 8.3% in 2018 to a notable 12.3% this year.

Freehold has historically been the preferred method of buying as the home buyer owns the property and the land it sits on and isn’t required to pay any ground rent of service charges. It also means you pay lower conveyancing costs when buying.

However, just over a year ago a leasehold scandal saw new homes sold with soaring ground rents as a result of developers selling freeholds on behind the back of sellers, and this has clearly had an impact with homebuyers paying even more to avoid such a situation.

The largest freehold price gaps are in London high-end market, with Camden home to the highest with a 227% increase!

In Kensington and Chelsea, the average price paid for a freehold property is £4.4m, 190% higher than the average price paid for a leasehold (£1.5m).

Homebuyers in Elmbridge are paying 159% more for a freehold, the highest outside of London, followed by the City of Westminster, Islington and Hammersmith and Fulham.

While London is home to the majority of the largest gaps, Chiltern is home to the next largest freehold price premium outside of the capital at 105%, with South Bucks also ranking in the top 10 with a 92% freehold property premium.

Despite last year’s revelations, there are still two areas where homebuyers are paying more for leasehold homes. Tameside and Sunderland are home to an average price paid for leasehold homes some 6% and 4% higher than freeholds.

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

“There is no doubt that the leasehold scandal has had a severe impact on buyer sentiment and the amount people are willing to pay to avoid any of the potential nightmares that unfolded last year.

So much so that the premium paid for a freehold home has already hit it’s highest levels in nearly a decade and will no doubt continue to do so.

A freehold is always the preferable path when buying but unfortunately, not everyone can secure themselves a foot on the freehold ladder, either due to a lack of stock or the additional financial cost.”

Leasehold vs Freehold Price Gap
Year
Leasehold (average price)
Freehold (average price)
Difference (%)
2019 to date
£262,114
£294,234
12.3%
2018
£276,711
£299,583
8.3%
2017
£276,567
£295,007
6.7%
2016
£266,976
£285,060
6.8%
2015
£256,508
£274,136
6.9%
2014
£249,190
£261,668
5.0%
2013
£235,427
£249,901
6.1%
2012
£221,501
£243,138
9.8%
2011
£209,589
£239,504
14.3%
Rankings – largest gap between Leasehold vs Freehold
Location
Leasehold-AveP
Freehold-AveP
Difference (%)
Camden
£856,987
£2,800,209
227%
Kensington and Chelsea
£1,529,712
£4,443,115
190%
Elmbridge
£353,184
£915,680
159%
City of Westminster
£1,419,121
£3,435,527
142%
Islington
£576,113
£1,324,060
130%
Hammersmith and Fulham
£668,476
£1,455,119
118%
Chiltern
£338,992
£693,773
105%
Hackney
£494,989
£1,007,112
103%
Richmond upon Thames
£515,448
£1,023,953
99%
Brent
£381,532
£748,585
96%
Barnet
£434,834
£834,689
92%
South Bucks
£458,601
£879,706
92%
Haringey
£459,078
£880,285
92%
Wandsworth
£577,455
£1,089,985
89%
Lambeth
£496,270
£894,390
80%
Rankings – largest gap between Leasehold vs Freehold Excluding London
Location
Leasehold-AveP
Freehold-AveP
Difference (%)
Elmbridge
£353,184
£915,680
159%
South Bucks
£458,601
£879,706
92%
Chiltern
£338,992
£693,773
105%
St Albans
£352,849
£700,665
99%
Runnymede
£274,403
£609,693
122%
Epping Forest
£298,184
£630,444
111%
Mole Valley
£280,648
£605,123
116%
Brentwood
£271,921
£584,989
115%
Winchester
£234,214
£544,833
133%
Epsom and Ewell
£305,596
£605,527
98%
Tandridge
£272,922
£570,426
109%
Reigate and Banstead
£267,542
£559,303
109%
Three Rivers
£337,913
£622,661
84%
Waverley
£298,685
£578,958
94%
Surrey Heath
£235,405
£513,351
118%
Rankings – smallest gap between Leasehold vs Freehold
Location
Leasehold-AveP
Freehold-AveP
Difference (%)
Tameside
£162,697
£153,521
-6%
Sunderland
£134,152
£128,289
-4%
South Hams
£340,163
£353,167
4%
Sheffield
£183,071
£199,505
9%
Salford
£170,344
£182,450
7%
Rotherham
£132,726
£155,300
17%
Rochdale
£139,357
£159,028
14%
North East Derbyshire
£194,343
£206,508
6%
Neath Port Talbot
£118,017
£129,201
9%
Liverpool
£128,075
£147,192
15%
Lincoln
£162,943
£173,554
7%
Isle of Anglesey
£172,901
£186,243
8%
Flintshire
£157,086
£179,867
15%
Bridgend
£148,235
£163,052
10%
Blackburn with Darwen
£131,804
£137,376
4%

Properganda PR

National and local media coverage for property businesses. Journo quotes delivered in minutes.

You May Also Enjoy

Breaking News

Prime London sellers return to market

The latest analysis from Beham and Reeves has found that the number of homes listed for sale at £2m or above across Prime Central London increased during the second quarter of 2026, although performance continues to vary considerably between the capital’s most prestigious neighbourhoods.   Benham and Reeves analysed current Prime Central London property listings…
Read More →
Estate Agent Talk

What to know when buying land

The closure of UK Land & Farms (UKLAF) has left a significant gap in the UK’s specialist land market with buyers and sellers now forced to adapt after 18 years of relying on UKLAF as the cornerstone of the industry. As interest in land continues to grow, the company says the closure also serves as…
Read More →
Letting Agent Talk

Tenant demand strong, landlord supply shrinking

New RICS data shows tenant demand at its strongest in over a year – while landlord supply keeps shrinking. That’s not bad luck. It’s a trust problem, and it’s fixable. “These numbers should be good news for landlords. Demand is the strongest it’s been in over a year. Instead, they are deciding to head for…
Read More →
Letting Agent Talk

Why Join a Letting Agents Association?

Why Every Letting Agent Should Join a Professional Body The lettings industry continues to evolve, with new legislation, increasing compliance requirements and higher expectations from landlords and tenants alike. For letting agents, staying informed and operating to recognised professional standards has never been more important. Joining a letting agents association provides far more than a membership…
Read More →
Breaking News

House price growth remained subdued in July

UK annual house price growth slowed to 1.8% in July, from 2.2% in June House prices were up 0.1% month on month Average time in a home is 14 years: 24 years for those owning outright and 5 years in private rented sector Three quarters of moves were within same tenure type in 2024/25 Headlines…
Read More →
Breaking News

Rent hikes and tighter tenant checks as landlord costs climb

Rising costs are prompting 63% of professional landlords to raise rents, prioritise lower-risk tenants and reassess portfolios Renters face a more expensive and more selective rental market as professional property investors respond to re-emergence of realistic gilt yields, rising operating costs and regulatory change by increasing rents and reassessing tenant risk and selection criteria, according…
Read More →