Managing a home

Buying the freehold of your flat or house

5 min read

Is it worth buying the freehold? Here are all the things that you need to consider as a leaseholder buying the freehold of your flat or house.

  • Ellie-Mae Johnson Deputy Conveyancing Manager
    Ellie Mae Johnson

    Deputy Conveyancing Manager

    Published January 31st 2024

young homeowner reflecting on her decision to buy the freehold of her flat

Buying the freehold of a flat

More specifically, 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:

  • The building must contain at least two flats

  • No more than 25% of the freehold building can be used for non-residential purposes (e.g. offices, restaurants, coffee shops)

  • At least two-thirds of the flats need to be owned by long leaseholders (more than 21 years)

  • At least half of the building’s long leaseholders must agree to the proposed approach and come together to purchase the freehold. If the block only has two flats, then both must agree to proceed.

Step 2: Calculate the costs and work out your finances

First you need to 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, you can 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, and they will need to reply within two months to let you know if they accept your proposal. If the answer is positive, 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 conveyancer 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.

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.

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