Buying the freehold of your flat or house

Key takeaways: Buying the freehold

You can ask the freeholder to buy the building and the land it stands on at any time. Buying your house or flat’s freehold can give you more freedom and control over managing and maintaining the property.

In this guide we cover:

Buying the freehold of a flat (collective enfranchisement)

You might be able to buy a share of the freehold together with other leaseholders in your building. This procedure is called Collective Enfranchisement and can be complicated as it involves multiple residents. It allows you to become your own freeholder and share ownership of the building and the land it stands on with other flat owners. This would mean you’d have control of your own lease and could extend it on your terms.

Is it worth buying the freehold of a flat?

Buying the freehold of a flat can give you greater control over how your building is managed and help you avoid ongoing costs like ground rent. However, it also comes with shared responsibilities and potential challenges when multiple leaseholders are involved. Below, we explain the key benefits and downsides to help you decide if buying the freehold of a flat is right for you.

Benefits of buying the freehold of a flat

Downsides to consider before buying the freehold of a flat

How to buy the freehold of a leasehold flat

To buy the freehold of your leasehold flat, you’ll need to talk to your neighbours to understand if they’re willing to purchase the freehold with you. You then need to make sure you meet certain criteria.

Step 1: Check if you’re eligible to buy the freehold

To qualify for collective enfranchisement, both the building and the leaseholders must meet specific legal criteria:

Step 2: Calculate the costs of buying the freehold

First, estimate how much buying the freehold is going to cost you – since sometimes this amount might be the same as extending your lease by 90 years. A surveyor can help you get an estimate of the purchase price of the freehold and decide whether you should go on and buy the freehold or extend your lease. Then, work out your finances, factoring in other costs such as conveyancing and legal fees. Find out more about the costs of buying the freehold below.

Step 3: Instruct a conveyancer

Once you’ve decided you can afford to buy the freehold, find an experienced conveyancer or solicitor who can guide you through the conveyancing process. The expert conveyancers that we work with can ensure that the legal side is completed on time, while providing support and advice.

Step 4: Sign a participation agreement

Your conveyancer will then create the participation agreement – which is a contract between all the leaseholders buying their freehold that clearly states the rights and obligations of the members and ensure everyone’s commitment. This will help protect you in case circumstances change and people want to pull out.

Step 5: Set up a freehold management company

To be able to buy the freehold, you can form a limited company together with other flat owners who will own and control it. This is usually done by setting up a freehold or flat management company. While Right to Manage is a separate legal process, many buildings use a company structure to manage the freehold collectively. This enables all residents to collectively manage the freehold, make decisions and resolve any disputes.

Step 6: Get a professional valuation

Find a surveyor to assess your property’s value and make sure the valuation, which is based on your home’s location, age and condition, will be carried out accurately. They’ll also review the value of similar properties in your area as well as the current performance of the housing market.

Step 7: Complete the freehold purchase

Once you’ve got your valuation, you can give a tenant’s notice to your freeholder. They will need to reply within two months to let you know if they accept your proposal. If they accept, you’ll need to negotiate the cost and agree on the price. Your conveyancer will help you complete your purchase, preparing and submitting any relevant paperwork and updating you on the process.

Buying the freehold of a house

If you’ve owned a leasehold house for at least two years, you usually have the legal right to buy the freehold. You can do this either formally through a statutory process with fixed timescales, or informally by negotiating directly with the freeholder. The latter option can help save you money and time. If you don’t agree the terms and price, try the formal route.

In both cases, you’ll need the support of a freehold conveyancing specialist who can guide you through the process and help you purchase the freehold as soon as possible.

Is it worth buying a freehold of a house?

Buying the freehold of a house is often simpler than buying the freehold of a flat and can offer long-term financial and practical benefits. While it removes leasehold restrictions, there are still costs and considerations to weigh up before proceeding. Here are the main benefits and downsides to consider.

Benefits of buying the freehold of a house

Downsides to consider before buying the freehold of a house

Potential challenges and common pitfalls of buying the freehold

While buying the freehold can be beneficial, there are potential challenges you may face during the process, such as:

Unresponsive freeholders

Sometimes, the freeholder might be hard to reach or unwilling to cooperate, most commonly with older buildings or absent landlords. If you can't get a response or they can't be found, you can apply to the court for a vesting order. This allows the sale to go ahead without the freeholder’s direct involvement. It's important to get legal advice in these situations to help you through the process.

Disputes over valuation

If you can’t agree on the price, the matter can be referred to the First-tier Tribunal (Property Chamber), which independently determines a fair value, based on evidence from both sides.

Coordination among leaseholders

If you're buying the freehold with other leaseholders, getting everyone on the same page can be tricky. People might have different opinions on costs, management, or responsibilities, which can slow things down. If not enough leaseholders join, you might not meet the eligibility criteria to proceed. Keeping everyone informed and involved is crucial, and communication breakdowns can cause problems. Getting a professional involved to help organise meetings and discussions can make things easier and help overcome these challenges.

The cost of buying the freehold

The cost of buying a freehold depends mainly on the length of your lease, the amount of ground rent you pay, and the value of the building. In general, the shorter your lease, the more expensive it is likely to be to buy the freehold. For example, if your lease has fewer than 80 years remaining, the premium can be significantly higher. That said, buying the freehold can help you save money in the long term by removing ongoing costs such as ground rent and certain insurance charges.

When buying a freehold, you should budget for several additional costs, including:

The total cost of buying the freehold can vary significantly, so getting professional valuation and conveyancing advice early on can help you understand whether it’s the right financial decision for your situation.

What are your responsibilities after purchasing the freehold?

Owning the freehold comes with ongoing responsibilities. You'll be responsible for:

It's essential to have clear agreements in place about how these duties will be managed and paid for among all freehold owners.

Setting up a management company

Forming a management company can help streamline the administration of your freehold. This allows all freeholders to collectively manage the property, ensuring everyone has a say in important decisions. It establishes clear responsibilities and makes handling maintenance and legal obligations more straightforward.

A management company can organise tasks like collecting service charges and arranging repairs, making the process more efficient without getting bogged down in too much detail.