Leaseholds on the rise with 8% growth in five years

The latest research from Warwick Estates shows that leasehold homes are playing an increasingly significant role in the UK housing market after enjoying significant growth in the past couple of years.

There is an increasingly common narrative around the housing market that leaseholds should be a thing of the past. This argument often starts by saying leaseholds don’t give owners sufficient freedom and protection in their homes. But, from analysing the past five years of the UK leasehold market in the private sector, it’s clear that they aren’t going anywhere. In fact, they’re growing in prominence.

The industry analysis by Warwick Estates shows that In 2015/16, leaseholds accounted for 20.8% of the private housing market.  In 2017, this had slumped to an all-time low market share of 20.3% and it looked as though leaseholds were quickly becoming the least desirable form of homeownership.

But the slump didn’t last long. In 2018/19, the leasehold sector’s market share increased to 21.1%, with the total number of leasehold dwellings increasing by 5.3% from just over 4 million to more than 4.2 million.

This growth continued into 2019/20, with leaseholds now accounting for 21.6% of all private dwellings, having increased by 3.4% annually.

So the idea that leasehold ownership is falling out of favour seems to be incorrect. Instead, after a few years of strife from 2015-2018, leaseholds are on the rise having risen by 8.15% across the five-year period examined in the data. 

COO of Warwick Estates, Bethan Griffiths, commented:

“Leasehold prominence in the UK housing market is on the up and this should come as no surprise as the sector provides a vital service to many. Those who argue leaseholds are increasingly defunct fail to consider how essential they are for the housing market, for the economy, and for buyers.

“Take a walk around any city; there are new developments and high rise flats going up everywhere. Those that are destined to be sold will be done so with leaseholds. For as long as people want to live in urban areas and in flats, leaseholds will provide the ability to secure and maintain this lifestyle choice.

“That’s not to say leaseholds don’t come with challenges, but with intelligent and communication-focused management that caters to landlords and leaseholders alike, these challenges can be mitigated and nullified.“