More than half of homes in London and 46% in Manchester are leasehold, new research has revealed.
Conveyancing provider My Home Move analysed more than 20 million property transaction records in England and Wales, using Land Registry price paid data, and found that, on average, 15% of homes are leaseholds.
However, in London, this rises to 53%, while 46% of residential property in Manchester is leasehold. Other large cities in the top 20 for leaseholds are Liverpool, Newcastle and Birmingham.
Highly dense populations and rising property prices mean that more houses are split into flats and more new-build apartments are built in city centres, leading to more leases being created.
Traditionally, leasehold properties – where you own the property for a certain length of time but not the land or building – take longer to buy than freehold properties, have more legal red tape and extra costs attached to them compared to freeholds.
Inner city apartments
In popular London postcodes, some areas are almost exclusively leasehold. For example, the N1C postcode in Kings Cross is 100% leasehold, while nearby Barbican (EC2Y) is 98% leasehold, and the WC1E postcode, where University College London is located, is 95% leasehold. In fact, more than 60% of residential properties in the central WC, EC and W postcodes are leasehold.
In contrast, moving further out to Greater London, leaseholds account for no more than 40% of properties, while in some areas – Abbey Wood in the SE2 postcode, for example – leaseholds only account for 14% of properties.
In Manchester’s M15 postcode, which includes Hulme and the Manchester Science Park, leaseholders account for 94% of property owners. And there is the same number of leaseholders in Manchester’s M50 – home to Salford Quays and Media City. In contrast, a little further out in Chorlton-cum-Hardy (M21 postcode), just 14% of properties are leaseholds.
Berwickshire and rural Wales are areas that have the lowest proportion of leaseholds, at less than 1%.
“Proportion of leaseholds could grow even more”
Doug Crawford, chief executive of My Home Move, says: “The redevelopment of England and Wales’ towns and cities over the past 30 years means there are more leasehold properties on the market, as new-build apartment blocks are constructed and old warehouses are converted into flats.
“Would-be buyers looking to claim a little piece of the city as their own may be in for surprise. Leaseholds make up almost all of the housing stock in some of our cities’ redeveloped districts, and the proportion of leaseholds could grow even more as additional new developments come ont o the market.”
“Home buyers need to understand that while purchasing a leasehold means they own the property, they won’t necessarily own the building or ground on which it is located. As a result of this, leasehold buyers often have to pay ground rent, service charges and buildings insurance to to the building’s owner.”