Buying Your Freehold

If you live in a leasehold flat you may be able to buy your Freehold to your building, in conjunction with the other leaseholders, provided that you meet certain criteria, you can act together to buy your Freehold. Likewise if you own a leasehold house you can usually buy the freehold, creating a significant one off uplift in value.

The process is known as collective enfranchisement and involves the participating leaseholders forming a company which will act as the nominee purchaser to purchase your freehold.

To proceed under the terms of The Leasehold Reform Housing and Urban Development Act 1993 at least 50% of the qualifying leaseholders must participate in buying your Freehold.

Where there are only two flats in the building, both qualifying leaseholders must participate together to purchase your Freehold.

How Much Will It Cost To Buy My Freehold?

The length of the leases when you apply to purchase the Freehold will have a significant effect on how much it will cost to buy your Freehold. The compensation due to the Landlord for the sale of your Freehold is made up of three parts:

  • Loss of income received from ground rents
  • Loss of reversionary value of the freehold on expiry of the leases
  • The marriage value

The majority of the compensation is usually made up of the last part; the marriage value. The marriage value is the potential for increase in the value of the flat arising from the grant of the new lease and the act stipulates that it should be split 50:50 between the Freeholder and leaseholders.

The legislation also stipulates that where the unexpired term of the lease exceeds 80 years the marriage value will be disregarded.

If you live in a block with provable development potential, such as scope to construct additional flats on the roof, the Freeholder may be entitled to further compensation.

The likely costs of purchasing your freehold to your building can be calculated by a Chartered Surveyor specialising in that type of work. If you require any further advice on buying your Freehold please call Dominic Henderson on 07825 537522 or email