Home Buying Freehold property premiums hit 205% across parts of the market

Freehold property premiums hit 205% across parts of the market

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. 

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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