HomeOwners Alliance logo

Sign up to our newsletter for the latest property news, tips & money saving offers

  • Selling up? Step by Step Guide to SellingRead More

Should I buy the freehold?

If you own a leasehold flat you don’t actually own the building and common areas. These are owned by your freeholder or landlord to whom you will need to pay service charges, insurance, ground rent and other charges over which you have little control. In this guide we look at two options to break free from this situation; how to buy the freehold and obtain the “right to manage”, and what you need to consider.

buy the freehold

What does buying the freehold mean?

Leaseholders of flats have a joint right, with other flat-owners in the block, to buy the freehold of their building. This is known as a right of “freehold enfranchisement” and it means that the leaseholders become their own freeholder.

Buying the freehold isn’t something you can do on your own – you have to get your neighbours involved too. The law allows at least half of the leaseholders to come together to buy the freehold of the block from the freeholder/landlord. So, at the end of the process, the flat-owners would:

  • Together own the freehold of the building (often by forming a limited company – this company will be owned and controlled by the flat owners); and
  • Separately, each would still have a long lease – but instead of this lease being from the old freeholder it would now be from the new entity that owns the freehold and that you and your neighbours now control

Once you jointly own the freehold, you can collectively set ground rents, shop around for the best insurance and generally be in control of your own destiny. Once you own the freehold you can extend your lease so it is a long lease with the only cost being legal fees.

It can be quite complicated to exercise your right to buy the freehold, so many people simply extend their lease and carry on with their freeholder.

Want to know how much a lease extension will cost and what’s involved? Our partnered lease extension solicitors can give you a free estimate and provide advice you can rely on. Click here to find out more and speak to them today

Am I eligible to buy the freehold?

Generally, the requirements for a group of leaseholders to buy the freehold are:

  • The building needs to contain at least two flats;
  • No more than 25% of the freehold building can be used for non-residential purposes (e.g. shops/offices);
  • At least two thirds of the flats needs to be owned by leaseholders who own long leases (originally granted for at least 21 years); and
  • At least half of the total number of flats in the building must be owned by leaseholders who want to buy a share of the freehold – so you don’t need to have all owners on board but you do need to have at least half of the flat-owners involved. If there are only two flats in the building, then both leaseholders must want to buy the freehold.

Should I buy the freehold?

It’s worth looking into buying the freehold if:

You have a difficult relationship with your freeholder or would you prefer not to have to deal with a separate, non-resident freeholder.

You are happy to come together with neighbours and work through the process of buying a share of the freehold and managing everything that needs to be done together.

You feel you have been paying over the odds for service charges, ground rent etc.

Your lease has around 85 years or less remaining. At 80 years it gets much more expensive to extend the lease and/or buy the freehold, making your home much less valuable and more difficult to sell. Buying the freehold can add value to a lease, particularly to one under or close to 80 years.

You and the other leaseholders have the money needed to buy the freehold. You will need to have a freehold valuation done to get an idea of the freehold purchase price, and add to that your own and the freeholder’s legal and valuation fees.

How much does it cost to buy the freehold?

In terms of working out the cost to buy the freehold, there are calculators online but none of them are particularly reliable as there are so many variables involved in estimating the cost. Freehold prices vary in the same way property prices vary, but certainly the shorter your lease, the pricier your freehold.

In terms of costs to buy your share of the freehold you will need to pay your flat’s share of:

  • The purchase price for the freehold (the premium).
  • The cost of a valuation surveyor to do an accurate freehold valuation so you avoid paying over the odds.
  • Legal fees for the leaseholders.
  • The freeholders legal and valuation fees.
  • Stamp duty land tax (if the purchase price is over £125,000).

Considering buying a share of a freehold? Our partnered solicitors can give you a free estimate and provide advice you can rely on. Click here to find out more and speak to them today

How can I afford to buy the freehold?

If you don’t have the savings to buy the freehold, you may still be able to re-mortgage to cover the cost of buying the freehold – speak to our fee-free mortgage brokers, L&C, for more information.

Another option: the “Right to Manage”

If you and your neighbours are unable to or do not want to buy the freehold, you may still be able to get the Right to Manage your block. It allows a “Right to Manage company” (made up of you and fellow leaseholders) to take over the management of the building themselves or to appoint their own managing agent. But there is no change in ownership of the building – the freeholder still owns it.

As with buying the freehold, the eligibility requirements are the same, you will need legal assistance with the process and you will have to pay the freeholder’s professional fees as well. But there are some differences, too:

  • It is much cheaper to exercise the right to manage as you don’t have to pay to buy the freehold;
  • You won’t increase the value of your flat by getting the right to manage;
  • The freeholder is still involved in the block – the freeholder still needs to be informed of lettings and alterations as required under the lease, to deal with lease extensions and can also be a member of the right to manage company.

Considering exercising your right to manage? Our partnered solicitors can give you a free estimate and provide advice you can rely on. Click here to find out more and speak to them today

Where do I start if I want to buy the freehold or exercise my right to manage?

Whether you are considering buying the freehold or exercising your right to manage, the first step is to get to know your neighbours and gauge their appetite and discuss which option they prefer and could afford.

Take a look at our more detailed guide on the process – Step by step guide to buying the freehold.

Alternatively you can get in touch with our partnered leasehold solicitors can give you a free estimate and provide advice you can rely on. Click here to find out more and speak to them today

Leave a comment (24)* Required

  1. LynneLynne

    18-01-2022 I have just looked at your website re: buying the freehold (flats). How up to date is your website / information as I cannot find a published date.

    • HomeOwners AllianceHomeOwners Alliance

      Hi Lynne, there is talk about changes but nothing has been announced yet, so this guide is very much up to date.

  2. Barbara Anne BirdBarbara Anne Bird

    the freeholder of my house has not claimed ground rent since 1943. They will probably be dead now. What do I have o do now to buy the freehold.

  3. DawnDawn

    To Anna.
    You have trump card- no planning permission.
    Mention it casually and then tell him that yourself unable to continually pay the bills and tell him to remove any rubbish.

  4. Anna JonesAnna Jones

    Hi any advice welcome on dealing with the nightmare freeholder I own the freehold with in a small building of 3 flats. He leaves me to pay all the communal bills then wait months to be reimbursed knowing I wouldn’t risk not paying the buildings insurance; treats the small communal area and basement as his own personal dumping ground; rents out the 2 flats he owns to anyone regardless of their references, noise, where they leave their rubbish etc. Has split one of the flats into 2 studios without any planning permission. I feel totally stuck with him.
    Thanks for any help

  5. IbIb

    I own a flat in a block of two upper flats and a shop below(3 properties in total; 2 residential and one commercial). The other residential flat is owned by the freeholder and the commercial shop on the ground floor is owned by a third party. CanI request to purchase the freehold of my flat or request a right to manage as I am currently being charged a management fee of £1300 for a property with just the stairway as the communal area?

  6. Cliff Ottley-ThistlethwaiteCliff Ottley-Thistlethwaite

    Good morning,
    I live in a development of 15 apartments which was completed in 2000. Each apartment has a 125 year lease as of January 2001.
    We formed a RTM 3 years ago.
    Last week the Freeholder “landlord” solicitors served a section 5 notice to each apartment. I think 8 of the apartments would be interested in purchasing the freehold but require further information/advise. Something 3 of us agree on is the seemly over valued price of the current freeholder? We each pay a ground rent of £250 per year (2 instalments of £125)
    We, the RTM company we set up, were thinking about purchasing the freehold when we set up the RTM but delayed this pending the governments reviews on leaseholds. Overtime & with the COVID Lockdown we have put the possible purchase of the freehold on pause.

  7. Roy SmithRoy Smith

    Hi We have lived in our leasehold house since 1975, and have 734 years remaining of an 800 year lease. The ground rent is £10 per annum and the the property value circa £280k. How easily could I purchase the freehold and what might I expect to pay in total, inc purchase price and all fees?

  8. simon quillishsimon quillish

    I live on a marina complex in a house with a pontoon mooring. there are around 200 houses on the marina that was built circa 1985. Currently we have around 950 years left on the lease.
    The residents have had a very poor relationship with the head lease owner who has appointed a managing agent who is particularly adversarial. The overall lease is with a local authority who is very much at arms length on issues.
    Would it be possible providing the majority of residents wish to combine and purchase the head lease / freehold ?

  9. Taya ChadawongTaya Chadawong

    Hi, I’m looking to purchase a leasehold property with 15 years lease left. What are my options would I be able to purchase the freehold with the property? I do have access to the title deeds and plan. 3 parties owns them, a developer that has been dissolved in 2008, one other person no longer alive and a lord.

    Can anyone help please?

    Thank you

  10. SamSam

    Hello, I have a 995 year lease on a flat. The building is divided into two flats and the second flat is owned by the Freeholder. The freeholder does not live here permanently or as their main residence. The freeholder bought the property some years after its conversion into two flats. Am I entitled to apply for a share of the freehold.

  11. Nichole MatthewsNichole Matthews

    I put an offer on a 1st floor that has been accepted (its a terrace house that has been split into two flats). The 1st floor flat has a lease of 88 years and the ground floor flat a lease of 114. The owner of the flat (1st floor) purchased the freehold at auction and now he wants to transfer the freehold with the purchase of the flat to us included in the purchase price. My partner and I are first time buyers and we are struggling to understand if this is a positive situation to be in or will it cause more hassle when we come to sell the property in a few years. Any guidance would be much appreciated. Thanks Nichole

  12. Mark PiertMark Piert

    My neighbour’s house is leasehold would I be able to buy the lease? It has a very large garden we have asked if we can buy some of the land as we don’t want another house to be built on it. Our neighbour has said no? We have the leaseholders details as we bought our lease a few years back.

  13. Marian McLoughlinMarian McLoughlin

    I have lived in my leasehold flat for 4 years. The lease has just about 100 years to run. There are 7 flats of which 5 own the freehold. 4 of the freeholders agree to the purchase but 1 does not. Does every freeholder have to agree?

  14. GertrudeGertrude

    The freeholder (Home Builder), of our block of leasehold flats is offering all 7 tenants the right to buy the freehold (£42,000). We are all new tenants (1yr), and our leases are for 250 years. Rent is 250 pa fixed for 10 years, rising in line with RPI after that. We also pay a Management Company for maintenance and upkeep of the grounds.
    The prospect of buying the freehold seems good to 4 out of 7 residents (the other three have declined). We have 2 other non-residents willing to pick up the 3 remaining shares. We are about to accept the offer, but the actual reality of legal costs involved, setting up a company, the annual ongoing costs of that, along with managing the building, and all the responsibilities that come with that seem a bit overwhelming.
    Given that the pros of being a freeholder will only increase the property by 1% (hopefully), enable us to increase the lease from 250 years to 999 years, erase the rent, give us control over management of building etc, we still have to buy the buildings insurance and pay into a kitty towards costs of company admin.
    Is it really beneficial to take on the freehold or should we just accept our freeholder selling to another investor?

  15. Yvonne TollidayYvonne Tolliday

    I have been in informal communication with the Landlords for my leasehold house about the possibilty of my purchasing the freehold. I have mentioned to them that I am torn between paying the approx £8k premium they have quoted & waiting for the new leasehold reform legislation to come in which aims to make enfranchisement costs much cheaper for homeowners. The Landlords have now said they dont believe the legislation will have a big effect on values, that it will take many years before it becomes law & in any case it will only apply to new builds from 2017 onwards. Thats not my understanding from reading the Law Commissions proposals, Govnt response etc, partic the last point about which properties it applies to. Who is right on these three assertions from my Landlords? Can you advise please. I am in an agony of indecision as to whether to buy now or await the legislation. Thank you.

  16. juliajulia

    I haves flat with 980 lease remaining. The flat sits in a building where only have one neighbor-a semi detached house, I.e. the building itself is like a semi detached house, but my part is a flat on first floor, there are three car ports underneath, on car raking space is mine.
    As I saw that a building need to at least have 2 flats to consider to buy freehold. Is that mean my flat is impossible to buy free hold?

    • Chandni SahniChandni Sahni

      Hello Julia, I think you might be correct but if you fill out the form on our “lease extension page” you will be able to speak to someone about this matter further Our lease extension partners are also able to help with queries about buying the freehold of your property so it is worth giving them a call

  17. BOB PBOB P

    I purchased the freehold on my coach house apartment in 2017. I want to insure the building myself but the management company who look after the estate where i live tell me they still have to insure the building and charge me for the premium. Is this correct? They insist it’s in the terms of my lease but surely this relates to the apartment when it was a Leasehold apartment. Everyone i have told this story to can’t believe i can’t arrange my own insurance. If i am the freeholder and own the building outright what interest is it of a management company to insure it. All advice welcome.

  18. Janine ChapmanJanine Chapman

    How do I find out if I am paying the proper ground rent.

  19. FrankFrank

    Hello, I am looking to buy a house that is leasehold. The building requires a lot of work. Would it be an odd question to ask if the freehold can be bought when negotiating the price. If it can be bought, can this be part of the legal work before completion? Thanks, Frank

  20. Angela AspreyAngela Asprey

    I would like to know how I could extend my ‘share of the freehold’ flat? As far as I am aware, everyone that is a freeholder owns the property in perpetuity, so it is just a case of a legal document to increase to 999 years. How could i do this without the cost of a solicitor? Many thanks.

    • AKerrAKerr

      Hi Angela. Your share of freehold property includes a long lease in your name as well as sharing ownership of the freehold with the the leaseholders of the other flats in the building. I assume you want to extend the term of your long lease. As you don’t have a third party landlord, you just need to agree the terms of this with the other flat-owners. But, even if there are no tough negotiations, it’s hard to avoid using lawyers as you will need someone with lease experience to draft the new long lease and to register it at the Land Registry. You can chat to a lease extension solicitor via our website here.
      HomeOwners Alliance

close popup ×

Before   you go...

If you found this website useful, could you spare a minute to leave us a review?