The latest research by London lettings and estate agent, Benham and Reeves, has revealed that the house price premiums commanded by freehold properties has climbed by an average of 6.5% across England and Wales, making them 42% more valuable than a leasehold home. However, leasehold homes have better weathered a cooling housing market having seen a lower level of house price depreciation.
Benham and Reeves analysed the latest Gov house price data (Dec 2023 – latest available)*, looking at the average value of both a freehold and leasehold home across each region of England and Wales and how the premiums commanded by the latter have changed when compared to the previous year.
The research shows that the average freehold property commanded a price tag of ÂŁ300,000 in 2023. Not only was this 42% more than the average leasehold home, but this freehold price premium has climbed by 6.5% when compared to 2022.
The South East was home to the highest house price premium for a freehold home, commanding 93% more versus the average price of a leasehold property.
Across the East of England, the East Midlands and the South West, freehold house price premiums averaged 80% in 2023, with the West Midlands also home to a hefty premium at 71%.
The East of England has also seen the premium paid for a freehold home increase by the greatest margin, up by 7% year on year, with the South East (+4.6%) and West Midlands (+3.5%) also seeing the strongest growth in freehold price premiums.
However, this hasn’t been the case across the board, with Yorkshire and the Humber (-0.7%), Wales (-3.2%), the North East (-4.8%) and East Midlands (-5.2%) seeing a reduction in freehold house price premiums.
What’s more, it’s leasehold homes that have better weathered a cooling UK property market in 2023.
Over the last year, the average price paid for a freehold home across England and Wales has fallen by -6.1%, however, the price paid for the average leasehold home has reduced by just -1.6% during the same period.
In fact, leasehold homes have seen a lower rate of house price depreciation versus freeholds in the East of England, South East, West Midlands, London, the South West and North West, while in Yorkshire, Wales, the North East and East Midlands it’s freehold homes that have performed better when it comes to annual house price change.
Director of Benham and Reeves, Marc von Grundherr, commented:
“The general perception amongst many homebuyers is that freehold homes make for a safer investment as they don’t have to worry about the lease expiring, ground rents, service charges, or seeking permission from the freeholder for any notable changes.
They also tend to be larger homes versus leaseholds which are, more often than not, flats and apartments.
As a result, freehold homes generally command a health house price premium and, as our research shows, this premium has only grown all the larger over the last year.
However, leasehold homes certainly have their place in the market and, what’s more, they’ve made for a better investment over the last year, having only seen a marginal reduction in value versus quite a substantial drop in the average price of a freehold home.”
Average price
Location
Average Freehold House Price (2023)
Average Leasehold House Price (2023)
Freehold House Price Premium (ÂŁ)
Freehold House Price Premium (ÂŁ)
South East
ÂŁ425,000
ÂŁ220,000
ÂŁ205,000
93%
East of England
ÂŁ360,000
ÂŁ200,000
ÂŁ160,000
80%
East Midlands
ÂŁ243,000
ÂŁ135,000
ÂŁ108,000
80%
South West
ÂŁ332,500
ÂŁ185,000
ÂŁ147,500
80%
West Midlands
ÂŁ248,500
ÂŁ145,000
ÂŁ103,500
71%
London
ÂŁ635,000
ÂŁ430,000
ÂŁ205,000
48%
Wales
ÂŁ200,000
ÂŁ143,250
ÂŁ56,750
40%
Yorkshire and the Humber
ÂŁ200,000
ÂŁ152,000
ÂŁ48,000
32%
North West
ÂŁ215,000
ÂŁ165,000
ÂŁ50,000
30%
North East
ÂŁ157,000
ÂŁ125,000
ÂŁ32,000
26%
England and Wales
ÂŁ300,000
ÂŁ211,250
ÂŁ88,750
42%
Location
Average Freehold House Price (2023)
Annual Change (%)
Average Leasehold House Price (2023)
Annual Change (%)
East of England
ÂŁ360,000
-3.2%
ÂŁ200,000
-7.0%
South East
ÂŁ425,000
-1.2%
ÂŁ220,000
-3.5%
West Midlands
ÂŁ248,500
-1.3%
ÂŁ145,000
-3.3%
London
ÂŁ635,000
-1.6%
ÂŁ430,000
-3.0%
South West
ÂŁ332,500
-0.7%
ÂŁ185,000
-1.3%
North West
ÂŁ215,000
-2.7%
ÂŁ165,000
-3.5%
Yorkshire and the Humber
ÂŁ200,000
-2.4%
ÂŁ152,000
-1.9%
Wales
ÂŁ200,000
-4.8%
ÂŁ143,250
-2.6%
North East
ÂŁ157,000
-3.7%
ÂŁ125,000
0.0%
East Midlands
ÂŁ243,000
-2.8%
ÂŁ135,000
0.0%
England and Wales
ÂŁ300,000
-1.6%
ÂŁ211,250
-6.1%
Average price
Location
Average Freehold House Price (2022)
Average Leasehold House Price (2022)
Freehold Price Premium (ÂŁ)
Freehold Price Premium (%)
Average Freehold House Price (2023)
Average Leasehold House Price (2023)
Freehold Price Premium (ÂŁ)
Freehold Price Premium (%)
Annual Change in Freehold Premium (ÂŁ)
Annual Change in Freehold Premium (%)
East of England
ÂŁ372,000
ÂŁ215,000
ÂŁ157,000
73%
ÂŁ360,000
ÂŁ200,000
ÂŁ160,000
80%
ÂŁ3,000
7.0%
South East
ÂŁ430,000
ÂŁ228,000
ÂŁ202,000
89%
ÂŁ425,000
ÂŁ220,000
ÂŁ205,000
93%
ÂŁ3,000
4.6%
West Midlands
ÂŁ251,850
ÂŁ150,000
ÂŁ101,850
68%
ÂŁ248,500
ÂŁ145,000
ÂŁ103,500
71%
ÂŁ1,650
3.5%
London
ÂŁ645,000
ÂŁ443,520
ÂŁ201,480
45%
ÂŁ635,000
ÂŁ430,000
ÂŁ205,000
48%
ÂŁ3,520
2.2%
South West
ÂŁ335,000
ÂŁ187,500
ÂŁ147,500
79%
ÂŁ332,500
ÂŁ185,000
ÂŁ147,500
80%
ÂŁ0
1.1%
North West
ÂŁ221,000
ÂŁ170,950
ÂŁ50,050
29%
ÂŁ215,000
ÂŁ165,000
ÂŁ50,000
30%
-ÂŁ50
1.0%
Yorkshire and the Humber
ÂŁ205,000
ÂŁ155,000
ÂŁ50,000
32%
ÂŁ200,000
ÂŁ152,000
ÂŁ48,000
32%
-ÂŁ2,000
-0.7%
Wales
ÂŁ210,000
ÂŁ147,000
ÂŁ63,000
43%
ÂŁ200,000
ÂŁ143,250
ÂŁ56,750
40%
-ÂŁ6,250
-3.2%
North East
ÂŁ163,000
ÂŁ125,000
ÂŁ38,000
30%
ÂŁ157,000
ÂŁ125,000
ÂŁ32,000
26%
-ÂŁ6,000
-4.8%
East Midlands
ÂŁ250,000
ÂŁ135,000
ÂŁ115,000
85%
ÂŁ243,000
ÂŁ135,000
ÂŁ108,000
80%
-ÂŁ7,000
-5.2%
England and Wales
ÂŁ305,000
ÂŁ225,000
ÂŁ80,000
36%
ÂŁ300,000
ÂŁ211,250
ÂŁ88,750
42%
ÂŁ8,750
6.5%
Leasehold and Freehold house price data sourced from the Land Registry Price Paid data set for transactions to have completed between January 2022 and December 2022 versus January 2023 and December 2023.
Analysis is based on PPD category A sales (primary not secondary) and excludes any property listed by type as ‘other’.
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About the Author
Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 14 international offices.