Leasehold homes in England sold for an average of £200,000 in 2020, a third (33%) cheaper than the £267,500 required to buy a freehold, research from Warwick Estates has found.
However, the government is currently taking action on such practices, as there are plans to allow leaseholders to extend their lease for 990 years with zero ground rents.
The biggest leasehold house price bargains based on transactions over the last year can be found in the South East.
In the South East, leasehold property sales sold for an average of £205,000 compared to £370,000 for freeholds, a huge 80.5% difference.
They’re also significantly cheaper in the East of England (68.4%), East Midlands (68.0%) and South West (64.0%).
Emma Power, COO of Warwick Estates, said: “Getting on the housing ladder isn’t getting any easier, as prices tend to rise every year.
“However, if people can overlook the negative headlines about buying as a leaseholder, our research shows they tend to offer a far more affordable route to homeownership.
“With the government now removing the danger of leaseholders being stuck with escalating ground rents, demand for leasehold homes is likely to climb and in the long run, we could well see the price gap between the two starts to close.
“As a result, savvy buyers who get a foot on the leasehold ladder now could well see a strong return on their investment when they come to sell.”