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0:06 AM, 15th June 2023, About 11 months ago 6
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There has been a surge in leasehold property purchases in the North West of England – thanks to affordability and the region’s fast-growing cities, research reveals.
The findings from peer-to-peer real estate investment platform, easyMoney, show that nationally, leasehold sales made up 22.8% of transactions.
However, in the North West, leaseholds represented a staggering 35.1% of all property purchases.
The firm’s study examined freehold and leasehold sales completed between May 2022 and April 2023 in England and Wales.
Jason Ferrando, the chief executive of easyMoney, said: “The North West is fast developing into a hub of economic activity, explaining why workers are buying leasehold apartments in the region.
“The success of Manchester and Liverpool has been a trend for a few years, but it seems this growth is spreading to other traditionally less fashionable towns and cities in the North West, with Bolton leading the way when it comes to the highest proportion of leasehold purchases outside London.”
He added: “For those that can afford it, London continues to lead the way as the leasehold capital of the UK, where over half of transactions are made using that model.
“However, affordability is key, and many workers are priced out of the capital and search for somewhere new to put down roots, while still being able to benefit from all that living in or near a city offers.
“For them it seems the North West is the obvious route, where there’s clearly a strong supply of leasehold apartments to purchase at the fraction of the cost of buying in London.”
The proportion of leasehold sales is higher than any other region outside of London, indicating a flourishing market for apartment acquisitions in the area, the firm says.
A total of 27,172 leasehold transactions occurred during the study period, with strong activity concentrated in Bolton, Oldham and Burnley.
London, where affordability constraints have long made leasehold purchases common, saw leaseholds account for more than half (50.4%) of all property buys.
The South East and South West also had substantial leasehold purchase percentages at 22.5% and 20.1%, respectively.
Meanwhile, the East Midlands recorded the lowest number of leasehold purchases at just 8.4%.
Bolton topped the list for leasehold purchases outside London with a striking 68% of transactions.
Following closely were Oldham (66%), Burnley (65%), Hyndburn (64%), Bury (60%) and Salford (59%).
These figures solidify the North West’s status as a leasehold hotspot, thanks to the success of major cities such as Manchester and Liverpool.
In the City of London, every property transaction used the leasehold system – and leasehold sales also dominate in Tower Hamlets (91%), the City of Westminster (88%), Camden (80%) and Hackney (80%).
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NewYorkie
9:56 AM, 15th June 2023, About 11 months ago
This is not because of 'affordability', albeit Liverpool is cheaper than London. It's because they are buying [renting] apartments, where Commonhold has been ignored in favour of leasehold, which has provided freeholders with zero risk investment opportunities.
Grumpy Old Git
10:19 AM, 15th June 2023, About 11 months ago
How much of this can be accounted for by the preponderance in the North West of leasehold terraced properties built in the early 1900s? Typically, they are 999 year leases with 800+ years currently to run so to all intents and purposes, they are as good as freehold. Freeholders mostly don't bother collecting the ground rent of (say) £3.00 p.a.! Totally different animal from the short-term leases found on new-build apartments, particularly in London.
NewYorkie
10:33 AM, 15th June 2023, About 11 months ago
Reply to the comment left by Grumpy Old Git at 15/06/2023 - 10:19
Yes, those old terraced streets of 'traditional' leasehold play a part in the figures, but you need only look at the vast swathes of new build apartment blocks that have shot up across the North West [and elsewhere], to realise that's the reason for the increase in leasehold. Buyers are not given any choice.
Grumpy Old Git
10:57 AM, 15th June 2023, About 11 months ago
Fair comment. Went to the Opera House, Manchester last week for the first time since BC (before covid) and Spinningfields area was unrecognisable!
NewYorkie
12:43 PM, 15th June 2023, About 11 months ago
Reply to the comment left by Grumpy Old Git at 15/06/2023 - 10:57
We are seeing it in York; hugely expensive apartments, and the jobs just aren't there like Manchester and Leeds. Apparently, 80% sold, but I don't know who to. BTL? There is a chronic shortage of rentals, but not of this type: 1 bed from £215K plus service charges. It says 'shared' tenure 🤔
Nick Stott - The Homesure Group
9:13 AM, 18th August 2023, About 9 months ago
What does this mean for the future of Freeholders, with the Leasehold Reform Act?
Will it lead to more leasehold properties (because there will be more value to the leaseholder), or fewer because Freeholds will be deemed immoral if not in the ownership of the person who bought the individual property?
There will always be a need for a lease when there are common parts, so will commonhold have a new lease of life?
Didn't commonholds fall out of favour in the same manner as the public vs. national debate, i.e. if you privatise the management of the communal areas, it'll be better?