If you have spoken to an agent in the last year, you will have heard the number. Christie & Co reported that 73% of day nursery transactions in 2025 were on a leasehold basis. The year before it was 78% of first-half sales, up from 67% the year before that.
It gets repeated as a single trend, usually as evidence that the sector is moving away from property ownership. Owners hear it and draw the obvious conclusion: the market has decided freeholds are for landlords rather than operators, so holding on to mine is the sensible course.
That conclusion may well be right for a particular building. But it is not what the number says, because the number is produced by two groups of people behaving in opposite ways.
The first: operators selling their freeholds on purpose
At the larger end of the market, groups are actively getting property off their balance sheets.
LXi REIT acquired the freeholds of 23 Just Childcare nurseries in an off-market transaction for £34 million, with the group continuing to operate the settings on thirty-year leases. Kids Planet has done the same; their accounts record a £14.2 million property revaluation triggered by a sale and leaseback.
The logic is not complicated. Capital tied up in buildings is capital not available for acquisitions, and in a consolidating market acquisitions are how a group grows. A freehold earns a property return. The same money deployed into another setting earns an operating return, which for a well-run group is the higher of the two.
Savills found that 71% of settings across the UK’s thirty largest groups are held leasehold. These are the most sophisticated operators in the sector, and they have concluded that owning the building is not the best use of their money.
The second: owners keeping their freeholds on exit
At the other end of the market, the opposite is happening.
Christie & Co attribute a significant share of the 2025 figure to owners choosing to retain their freeholds when they sell. An owner-operator sells the business, grants a lease to the buyer, and keeps the building as an income-producing asset in retirement.
That transaction is also recorded as a leasehold sale. The buyer acquires a leasehold business, exactly as they would if they were buying from a corporate group. In the statistics, it is indistinguishable.
But nothing about it resembles the first case. In the corporate version, the operator has decided the building is worth less to them than the capital it represents, and has sold it to a professional investor who wants to hold property. In the independent version, the owner has decided the building is worth keeping, and has retained it personally.
One group is selling. The other is holding. Both show up in the same percentage.
Why the conflation matters
An owner who reads “73% of transactions are leasehold” as a signal to keep their freehold is reading a number that is partly produced by operators doing precisely the reverse.
Worse, they are taking a signal from the wrong group. The corporate decision to sell freeholds is made by operators with a pipeline of acquisitions to fund and a cost of capital to beat. That reasoning does not transfer to someone leaving the sector entirely. And the independent decision to retain is made by individuals whose circumstances vary enormously and whose outcomes nobody publishes.
The trend, in other words, tells you what is happening in the market. It does not tell you what should happen to your building.
Before you use the number at all
There is a further complication, and it is the one least often mentioned.
A large part of the leasehold figure is not a decision about strategy. It is a description of property prices.
Savills’ analysis found that London and the South East dominate the leasehold model, with 77% of settings held on a leasehold basis, reflecting the elevated capital values that make freehold acquisition less viable for operators. Wales and the North show the highest proportions of freehold holdings, consistent with lower property costs in those markets.
So the “shift to leasehold” is partly a map of where buildings are expensive. In much of the country, operators lease because buying is out of reach, not because they have weighed the alternatives and preferred it. The same analysis found starting rents in London and the South East rose 47% over five years on a per square foot basis, with the sharpest increase between 2023 and 2024 as demand followed the expansion of funded childcare.
A national percentage covering both a converted house in Wales and a purpose-built setting in Surrey is not describing a single market. It is averaging several.
What this means for a decision about your own building
Three questions get you closer than the headline figure will.
Which of the two behaviours is your situation closer to? If you are leaving the sector, the corporate rationale for divesting property does not apply to you — you have no acquisitions to fund. If you are staying and expanding, it may apply very directly, and it is worth understanding properly.
What does your local market look like, rather than the national one? Capital values and rents in your area determine who can afford to buy or lease your building. A percentage drawn from the whole of the UK will not tell you that.
Who is the leasehold sale actually for? In the corporate version, the operator sells the freehold to an investor and keeps trading. In the independent version, the owner keeps the freehold and stops trading. Those are different transactions producing different risks, and it is worth being clear which one you are contemplating before you take comfort from a statistic that contains both.
The number is real and the direction is genuine. Leasehold transactions are increasing, and that is worth knowing. But a market-wide percentage is an average of many decisions made for incompatible reasons, in places with very different property markets, by people in very different positions.
It describes the market. It does not describe your building.