"Regardless of property type and location, the figures show that those looking to purchase a freehold will pay a considerable premium versus leasehold properties, and this is largely down to the benefits they offer"
- Verona Frankish - Yopa
Homebuyers across England and Wales are paying nearly a third more for freehold homes, with premiums in some local markets climbing to more than double the price of leasehold properties, according to new research from Yopa.
The analysis of Land Registry data looked at every residential sale completed in the past 12 months, comparing median prices for freehold and leasehold transactions.
Across England and Wales, the average buyer paid £292,500 for a home. Freehold purchases averaged £310,000, while leasehold sales stood at £230,000. This equates to a freehold premium of 29.6%.
Freehold homes are often more appealing as the buyer owns both the property and the land, avoiding ground rents, service charges, and lease extension costs. Owners also face fewer restrictions, with greater freedom over alterations, sub-letting, pets, or permissions. Meanwhile, leaseholds have faced negative publicity in recent years due to issues such as escalating ground rents and high service charges.
At a regional level, the South East recorded the highest freehold premium, with prices averaging 60.6% more than leaseholds. Strong premiums were also seen in the East Midlands (59.5%), West Midlands (54.7%), East of England (54.2%), and South West (53.8%).
In certain local markets, buyers are paying significantly more. In the City of Westminster, the median freehold price was £2,700,000 compared with £785,000 for leasehold, a difference of £1,915,000, representing a 109.9% premium.
Other notable areas included:
Kensington and Chelsea, where the premium was 102.5%
Isles of Scilly, at 97%
Camden, at 95.5%
South Holland, at 95.4%
Islington, at 90.8%
Forest of Dean, at 86.6%
Boston, at 86.3%
Hammersmith and Fulham, at 85.7%
Wychavon, at 85.7%
Importantly, these results were not limited to London. Rural and coastal areas such as the Isles of Scilly, South Holland, Forest of Dean, Boston, and Wychavon were also among the top ten for freehold premiums.
“Leasehold properties may predominantly be flats and apartments, which is a factor with respect to the lower price paid in some areas of the market; however, many leaseholds are also located in popular urban hubs where underlying values can be higher, which helps to balance the picture when comparing prices,” said Verona Frankish, CEO of Yopa. “Regardless of property type and location, the figures show that those looking to purchase a freehold will pay a considerable premium versus leasehold properties, and this is largely down to the benefits they offer - such as the absence of ongoing costs like ground rent and service charges.
“Leasehold homes have also attracted bad press in recent years, which has left a lasting mark on buyer sentiment, with scandals around escalating ground rents and excessive service charges making headlines and deterring many from leasehold ownership.
“However, we have seen the Government act to help boost the popularity of leasehold properties in recent years, with the Leasehold Reform (Ground Rent) Act 2022, which banned ground rents on most new long leases, and the Leasehold and Freehold Reform Act 2024, both introduced to create a fairer more transparent landscape.
“These measures are designed to better protect leaseholders and may in time narrow the gap in prices, but for now the greater security, simplicity and peace of mind offered by freehold continues to justify a premium in the eyes of most buyers.”
