Leasehold Property Sales Soar in the North West

Recent research has unveiled a remarkable surge in sales for Leasehold properties, particularly in the North West region.

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Affordability of Property in the North West

Analysis conducted by easyMoney, which examined property transactions completed over the past year across England and Wales, has shed light on the increasing demand for Leaseholds in the North West of England. It appears that buyers are being drawn to this area due to its rapidly developing cities and the attractive affordability of properties.

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Highest Proportion of Leasehold Sales in North West at 35.1%

The data indicates that Leasehold sales accounted for 22.8% of property transactions nationwide. However, in the North West, this figure soared to 35.1%, surpassing the national average by a significant margin. In fact, it represents a larger proportion than any other region outside of London, suggesting a thriving market for apartment purchases in the area.

Over the specified period, a total of 27,172 leasehold transactions were recorded. In London, Leaseholds constituted over half (50.4%) of all purchases, a trend that has long been prevalent due to affordability constraints in the capital, prompting the use of the Leasehold system for apartment acquisitions.

Leasehold purchases also accounted for a considerable share in the South East (22.5%) and South West (20.1%), while the East Midlands witnessed the fewest leasehold transactions (8.4%).

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Leasehold Sales Driven by the Success of Manchester & Liverpool

When considering local authorities, Bolton stood out as the area with the highest proportion of Leasehold purchases outside of London, at 68%. Following closely behind were Oldham (66%), Burnley (65%), Hyndburn (64%), Bury (60%), and Salford (59%), thereby solidifying the North West's position as a Leasehold hotspot. This surge can likely be attributed to the success of cities such as Manchester and Liverpool.

In the City of London, all transactions (100%) were conducted using the leasehold system. Similarly, leasehold activity dominated in Tower Hamlets (91%), the City of Westminster (88%), Camden (80%), and Hackney (80%).

Jason Ferrando, the CEO of easyMoney, commented on the findings, stating, "The North West is rapidly evolving into a center of economic activity, which explains why individuals are purchasing Leasehold apartments in the region. The growth and success of Manchester and Liverpool have been evident for a few years, and now we see this expansion extending to other traditionally less fashionable towns and cities in the North West, with Bolton leading the way in terms of the highest proportion of leasehold purchases outside of London."

He further added, "While London continues to lead as the leasehold capital of the UK, with over half of transactions following this model, affordability remains a crucial factor. Many individuals are priced out of the capital and seek new places to establish roots while still enjoying the advantages of living in or near a city. For them, the North West appears to be the logical choice, as it offers a robust supply of Leasehold apartments at a fraction of the cost compared to London."

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Leasehold Reform in England: Benefits for Leasehold Owners

With the Leasehold Reform Act 2022, it makes Leasehold ownership much more attractive to investors.

Leasehold reform in England brings several benefits for Leasehold owners. First and foremost, it provides an opportunity to extend the length of their Lease, offering greater security and peace of mind. This is particularly valuable for those with shorter Lease terms, as it ensures they can continue to occupy and enjoy their property without the looming uncertainty of Lease expiration.

Another key benefit is the potential to acquire the Freehold of their property through collective enfranchisement. This allows Leasehold owners to gain full ownership and control over their property, eliminating the need to pay ground rent or seek permission for alterations, giving them greater autonomy and flexibility.

Leasehold reform also addresses the issue of onerous ground rents. The new legislation restricts the ability of developers to impose excessive and escalating ground rent charges, protecting Leasehold owners from unfair financial burdens.

Additionally, the reforms introduce clearer and more transparent processes for Lease extensions and enfranchisement, making it easier and more affordable for Leasehold owners to exercise their rights.

Overall, the Leasehold reforms in England aim to empower Leasehold owners, enhance their rights, and provide a fairer and more secure environment for homeownership.

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Leasehold Buy-to-Let Property Investment

Leasehold apartments are particularly attractive to investors as they provide affordable property in the city centre that is in high demand from private renters.

JLL’s ‘Big Six’ research tracks residential development activity, prices and rents across Manchester, Birmingham, Leeds, Bristol, Edinburgh, and Glasgow, revealed that rents in Manchester increased by 22% annually, surpassing Birmingham, which recorded the next biggest growth at 18%.

Furthermore, over the next five years it is predicted that rents in Manchester will increase by 21.6%, the highest predicted across the six markets analysed.

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