South West Focus: Agents report soaring demand for leaseholds

Sales of leaseholds in the South West are bucking the national trend by far outstripping those of freeholds, according to local agents.

The news comes despite several recent reports from national property agents that freehold sites are currently the most sought after.

Mike Phillips, director at Exeter-based agent Stonesmith, said: "Up until June last year it was the case that freehold sales outnumbered leaseholds by 3:1. Now that trend has totally reversed."

Managing director Matt Bettesworth said that his agency, Bettesworths, also based in Devon, had similarly experienced a surge in interest, with seven leaseholds having sold since December and five more expected to complete in February.

"People are struggling to raise the finance on a freehold," he said, "because the banks are not lending. Leaseholds, if priced correctly, are very achievable. People are able to obtain the cash without approaching the banks. The South West still holds its traditional appeal. We think we may see more people wanting to relocate and invest in pubs down here as investments on the back of redundancies and a lack of jobs."

Bettesworth also said landlords were now offering new leases on many of their properties with lower ingoings, rent-free periods and low initial rents to tempt buyers.

"Landlords are having to be realistic and flexible and incentivise buyers," he said. "This is creating lots of interest for both tied and free-of-tie leases."

However, Chris Irving, divisional director at Fleurets' South West office, said he believes the strongest interest nationally is still for freehold properties. "Freeholds at the lower end, between £200,000 and £500,000, are achieving the strongest interest across the board," he said. "Prices have come down and people are keen to acquire properties at bargain prices."