Buying the freehold of your flat or house

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. However, to complete the purchase, you’ll need to meet certain conditions.

In this article:

Buying the freehold of a flat

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.

How can I buy the freehold of my 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 your eligibility

To buy your flat’s freehold you need to be a qualifying tenant. This means you need to meet the following conditions:

Step 2: Calculate the costs and work out your finances

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.

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 company of qualifying tenants

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 known as Right to Manage or a flat management company and can be a good way to make sure all members have the same legal responsibilities and duties. This enables all residents to collectively manage the freehold, make decisions and resolve any disputes.

Step 6: Get a 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 sale

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 been the legal owner of a leasehold house for at least two years, you can request the freeholder to follow a formal procedure with strict timescales or informally ask if they’re willing to sell the freehold. 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?

Buying the freehold of a house comes with many advantages, including having more control. This means you’ll have the freedom to make important decisions such as picking insurance and determining maintenance costs. Plus, you can make savings and reduce costs as you won’t be required to pay ground rent. And since most buyers prefer to buy freehold houses, it can make your home much easier to sell.

If you’re buying a flat, you can still benefit from having more control on how the property is managed. You can also benefit from extending your lease by up to 999 years with only legal fees to cover and you won’t need to pay ground rent.

However, this means you’ll be responsible for organising the building’s maintenance and making sure it’s done properly. And since a lot of people might be involved in the process, you may need to resolve problems with your neighbours and rely on them to make decisions.

Potential challenges and common pitfalls

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. 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

There might be disagreements about how much the freehold is worth. If you and the freeholder can't agree on a price, the issue can be taken to the First-tier Tribunal (Property Chamber). This is an independent body that can decide what the fair value should be, 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 a freehold

Freehold prices can vary, depending on the property’s condition, as well as your lease’s length and ground rent. The shorter your lease, the more expensive your freehold will be. For example, if your lease has fewer than 80 years remaining it can be quite pricey to purchase the freehold. However, buying the freehold can help save you money on costs like rent and insurance in the long run.

To purchase the freehold, you’ll need to factor in some additional costs, such as:

An experienced conveyancer can help you find out more about the costs and will complete the legal work on your behalf, while including you in the process.

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.