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In this article, we discuss what you need to know about share of freehold flats, including how ownership works, the costs, and the conveyancing process, with expert guidance available from My Home Move Conveyancing to help you navigate the legal steps confidently.
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A share of freehold is a type of property ownership
It gives you temporary ownership of your flat (i.e. a lease) alongside shared ownership of the building and land (i.e. the freehold)
The benefits include more control over managing and maintaining the building and easier lease extensions
It requires navigating shared decision making with the other freeholders
In this guide we cover:
When looking at properties to buy, you'll come across three terms: leasehold, freehold, and share of freehold. Before we get into what a share of freehold means, it helps to understand the other two:
Freehold means you own the building and the land it sits on, outright and indefinitely. Most houses are sold as freehold.
Leasehold means you own the right to live in a property for a fixed number of years, as set out in the lease. Someone else (the freeholder) owns the building and the land. Most flats are sold as leasehold.
Share of freehold sits between the two. You still own a lease for your individual flat, but you also own a share in the freehold of the whole building, usually together with the other flat owners.
Learn more about freehold vs leasehold ownership.
Share of freehold | Leasehold | |
|---|---|---|
Typical property | Flat | Flat |
What you own | Your flat until the lease expires, along with a share of building and land | Your flat until the lease expires |
Who owns the building and land | You along with the other joint freeholders | Someone else (the freeholder or landlord) |
Say in decisions | You along with the other joint freeholders | Limited, decided by the freeholder or landlord |
Lease extensions | Negotiate directly with the other co-owners | You'll go through a statutory process and cost |
Typical costs | Your share depends on the building and management arrangements Negotiated extension cost: £500 - £1,000 in legal and administration fees, depending on the arrangements between freeholders | Ground rent: £50 - £300 per year (if applicable) *Ground rent cap of £250 due to come into force in late 2028 Administration fees: £150 - £300 per transaction Extending the lease: You can ask the landlord to extend the lease at any time. When there are 8 years or less remaining on your lease, the cost of extending it increases significantly |
Share of freehold | Freehold | |
|---|---|---|
Typical property | Flat | House |
What you own | Your flat until the lease expires, along with a share of the building and land | The whole building and the land it sits on |
Who owns the building and land | You along with the other joint freeholders | You outright |
Say in decisions | You along with the other joint freeholders | You |
Lease extensions | Negotiate directly with the other co-owners who share the freehold title | Not applicable as there's no lease |
Typical costs | Your share depends on the building and management arrangements Negotiated extension cost: £500 - £1,000 in legal and administration fees, depending on the arrangements between freeholders | Buildings insurance: £170 - £350 per year (depending on the property size, value, and location) Maintenance: £200 - £350 per year |
A share of freehold is a property ownership structure where you own a lease on your flat and share ownership of the building and land with the other joint freeholders in your building.
When flat owners have a share of freehold, the freehold itself is usually owned by a company set up specifically for that purpose, or it can be jointly owned by up to four freeholders.
Each joint freeholder has a say in how the building is run and is responsible for things like insurance, repairs, and maintenance. Everyone pays their share, typically through a service charge.
When you enter a share of freehold, you may be required to take on more than one legal responsibility.
Leaseholder: You are a leaseholder because you own the individual lease to your flat. Therefore, you are the "tenant" of the freehold.
Joint freeholder / co-freeholder: You jointly own and control the land and building structure. When it comes to decisions about the building, you act as a joint freeholder.
Shareholder: If a company is set up to manage the freehold, then you own a share in it. When it comes to arranging or voting on company matters, you act as a shareholder.
Trustee: If no company is set up, you’ll act as a trustee instead, where your name goes directly on the deeds with up to three other co-owners.
You and the other joint freeholders make the decisions about the building, rather than an outside landlord.
Since there's no external freeholder, there's typically no ground rent to pay.
As part-owner of the freehold, extending your lease is usually more straightforward and can cost less than going through the statutory process.
Decisions about repairs, maintenance, and costs need agreement from all joint freeholders, which can slow things down.
Running the freehold company, arranging insurance, and maintaining the building all come with costs shared across the owners.
Where several joint freeholders are involved, disputes over spending or building management can arise.
Some mortgage lenders ask more questions about the freehold company's structure and finances, which can add steps to a sale.
We'll guide you through the legal side of your purchase so you can move forward with confidence. Speak to our move specialists for a tailored quote.
Whether you're buying or selling, a share of freehold works a little differently to a standard leasehold sale. As a buyer, it's worth knowing what to check before committing. As a seller, there's an extra step to transferring ownership. Here's what's involved on both sides:
Buying a flat with a share of freehold works much like any other leasehold purchase, but with a few extra things worth checking before you commit.
Disagreements and poor administration are two of the biggest drawbacks of share of freeholds. Buying a share of freehold flat is typically only worth it if it's well run. Keep an eye out for these red flags:
No recent company accounts: If the freehold can't produce up-to-date accounts, that's a sign its finances aren't in order or aren't being managed properly.
No reserve fund: If there's little or nothing set aside for major works, you could be hit with a large unexpected bill soon after moving in.
Leaseholders missing from the arrangement: If one or more flats aren't freeholds, the conflict of interest between residents can make decisions complicated, and you may inherit an unresolved issue.
Ongoing disputes or major works: Unresolved disagreements between joint freeholders, or planned works with no clear cost breakdown, are worth investigating before you commit.
A slow or incomplete management pack: This is one of the most common causes of delay in share of freehold sales, and can hint at wider disorganisation within the company.
Lender restrictions: Some lenders won't mortgage share of freehold properties below a minimum number of shareholder - leaseholders, so it's best to confirm this early on to avoid a fall through.
Your conveyancer or solicitor can help you request and review this information as part of the conveyancing process. This will help you to identify any potential issues as early on as possible to lower the risk of delays later.
If you're selling a share of freehold flat, you'll be pleased to learn they tend to be more appealing to buyers than leaseholds. However, this mainly affects saleability rather than value and depends on how well the building has been managed.
Selling a flat with a share of freehold involves an extra step compared to a standard leasehold sale; transferring your share in the freehold company as well as your lease.
When you sell, your share in the freehold company needs to be formally transferred to the buyer. This usually involves:
Transferring your share certificate to the new owner
Updating the company's register of members
The buyer signing a deed of covenant, agreeing to take on the responsibilities of the freehold
Conveyancing takes care of the legal transfer of a property and is required any time a share of freehold is sold. It typically takes a similar amount of time to a standard leasehold sale, around 18 - 24 weeks. The extra step of transferring company shares doesn't usually add much delay, provided the paperwork is in good order.
However, it's important to consider that where it can take longer is if the freehold company's records aren't up-to-date, if there's no management pack readily available, or if there is a property chain involved. Getting this information organised as early on as possible helps keep things on track.
The average conveyancing time for My Home Move Conveyancing is 18 weeks. See our breakdown of conveyancing timelines for different types of property sale.
If your building doesn't currently have a share of freehold arrangement, leaseholders can club together to buy the freehold from the existing landlord. This is known as collective enfranchisement.
A lease runs for a fixed number of years. As the remaining term gets shorter, the flat becomes harder to mortgage or sell, and the cost of extending the lease typically goes up. If a lease is allowed to run out completely, ownership of the flat reverts to the freeholder, making it important to consider extending the lease well before this happens.
One of the practical advantages of owning a share of freehold is how much simpler this process becomes. Rather than going through the formal statutory process required for leaseholders, you and the other owners can agree new lease terms directly.
This often makes the process quicker and less expensive as there's no need to negotiate with an external landlord. You'll still need a conveyancer to prepare and register the new lease, but with fewer parties involved, the process is much more straightforward.
As leasehold law continues to evolve, it's worth checking the latest position before extending your lease, but owning a share of the freehold generally gives you more control over the process and puts you in a stronger position either way.
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