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Should I buy the freehold?

If you own a leasehold flat you don’t actually own the building and common areas. That’s 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; buying the freehold and obtaining the “right to manage”, and what you need to consider.

should I buy the freehold of my house>

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 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?

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 what the costs involve, 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, London & Country, 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?

With either option, you need 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 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

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  1. Hi,
    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

    Comment by Nichole Matthews — August 6, 2020 @ 3:44 pm

  2. 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.

    Comment by Mark Piert — July 23, 2020 @ 6:38 pm

  3. 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?

    Comment by Marian McLoughlin — November 30, 2019 @ 5:54 pm

  4. Dear Gertrude. It might be worth setting up a call with LEASE – https://clients.lease-advice.org/Appointment/Appointment?isFireSafety=False to discuss your concerns

    Comment by HomeOwners Alliance — October 8, 2019 @ 11:26 am

  5. 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?

    Comment by Gertrude — October 7, 2019 @ 7:00 pm

  6. 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.

    Comment by Yvonne Tolliday — August 5, 2019 @ 4:57 pm

  7. 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 https://hoa.org.uk/services/find-lease-extension-solicitor/. 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

    Comment by Chandni Sahni — December 10, 2018 @ 10:12 am

  8. 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?

    Comment by julia — December 5, 2018 @ 2:41 pm

  9. Hi Bob, This does sound odd. When you purchased your freehold, were there any restrictions or covenants? You may find the assistance of our Home HelpLine and Legal Advice Line useful if you decide to become a member of HomeOwners Alliance. See here for further information – https://hoa.org.uk/homeowners-alliance-membership/.


    Comment by Paula — April 12, 2018 @ 1:09 pm

  10. 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.

    Comment by BOB P — April 4, 2018 @ 4:25 pm

  11. Check your lease which sets out the ground rent. You don’t have to pay ground rent unless your landlord has sent you a formal, written demand for it. They can take legal action if you don’t pay after you’ve received the demand and unpaid ground rent can be recovered going back 6 years. For more information go to https://hoa.org.uk/advice/guides-for-homeowners/leaseholders-charges-what-to-know-before-you-buy/ and https://hoa.org.uk/advice/guides-for-homeowners/i-am-managing-2/should-i-extend-my-lease/service-charges-and-maintenance-companies-problems-with-your-leasehold-property/ Do get in touch with us at hello@hoa.org.uk if you need more help.

    Comment by AKerr — March 27, 2018 @ 6:24 pm

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

    Comment by Janine Chapman — March 27, 2018 @ 10:32 am

  13. Thanks Frank. Not odd at all – you should do that – and if you can agree a price it can happen on completion. Otherwise you will need to wait 2 years after moving in before you have the right to buy the freehold. But the devil is in the detail e.g. Make sure there aren’t money-making covenants such as paying for permission to remortgage. If you’d like more tailored advice, then join us for only £45 for the year. Thanks! HomeOwners Alliance team

    Comment by AKerr — October 13, 2017 @ 11:40 am

  14. 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

    Comment by Frank — October 12, 2017 @ 10:20 am

  15. 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

    Comment by AKerr — October 2, 2017 @ 2:53 pm

  16. 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.

    Comment by Angela Asprey — September 30, 2017 @ 8:57 pm


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