Changing lifestyles and not the cladding and doubling ground rent scandals are why more buyers are turning away from leasehold properties to freehold, a leading agent has claimed.
Chestertons says that across its key markets in Chelsea, Belgravia, Knightsbridge and South Kensington, sales of freehold properties as a proportion of total sales increased from 20% in 2019 to 25% in 2020. And during the first three months in 2021, this ratio increased to 29%.
The estate agency says both investors and home buyers seen unconcerned by the high annual charges most freeholders squeeze out of leaseholds and the restrictive clauses on renting out via Airbnb and keeping pets, hidden charges and doubling ground rents.
This government is part way through introducing changes to the UK’s system of freeholder, leasehold and ground rents as legislation passes through parliament, and has set up a cross-sector task force to look at greater adoption of commonhold.
Reforming leasehold remains a hot political potato. Last year Michael Gaston, MD of Estates & Management argued that getting rid of freeholders would prevent properties being “managed in a professional and efficient manner over a long-term period,” he told The Negotiator.
Guy Gittins (pictured), MD Of Chestertons, adds: “The current demand for freehold properties really is driven by people’s changing lifestyle requirements due to the pandemic and not because they are looking to avoid leasehold properties.
“We are witnessing an increasing number of buyers who wish to own a property that offers access to more internal space for a home office or access to a garden. These requirements happen to be more easily satisfied by houses that are predominantly freehold, which inevitably leads to a sales boost for freehold properties. Whether this demand is going to keep momentum remains to be seen.”