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Leasehold Enfranchisement

Buying The Freehold (Leasehold Enfranchisement)

A flat with a long lease is a valuable asset. However, as time passes the length of time remaining on the lease gets shorter and the lease will eventually come to an end and revert to the head landlord or freeholder.

When the time remaining on the lease falls below 80 years many high street lenders will refuse to grant a mortgage on the property and so the open market value of the property is detrimentally affected.

The Leasehold Reform Housing and Urban Development Act 1993 gives residential leaseholders the statutory right to protect the value of their asset by either:

BUYING the freehold (enfranchisement) or EXTENDING their lease

Buying the freehold

The main advantage to buying the freehold is that the leaseholders can extend their leases and reduce the ground rent to a peppercorn without needing the approval of a third party.

Should any variation to the leases be required the leaseholders can consent to varying the leases without the fear of incurring additional costs or a premium from the freeholder.

  • The building containing the flats must be self contained or a self contained part of a building
  • The leases of the flats must have been for more than 21 years when granted and there must be at least two of them
  • At least 2/3rds of all the flats must be let on long leases
  • At least 50% of the leaseholders of all flats must want to participate.

The leaseholder pays a premium to the landlord for the freehold interest.

You usually will need to instruct a valuer with experience of this type of transaction to advise you on the premium that you should propose as a notice requiring a lease extension can be invalidated by an unrealistic premium.

The leaseholders are also responsible for the Landlord’s reasonable costs (the First-tier Tribunal (Property Chamber) (FTT) can determine whether the fees are reasonable in the absence of agreement).


The leaseholders acting together usually form a company to hold the title. The company serves notice on the freeholder specifying the premium proposed. The freeholder has two months to reply to accept the right to the lease extension or dispute it. The freeholder can only dispute the right on very narrow grounds.

Usually negotiations take place between the parties on the premium to be paid, the rights to be granted and the provisions to be contained in the conveyance. The statute allows six months for the terms to be agreed or either party can apply to the Tribunal for them to determine the terms.

The conveyancing procedure is then followed to transfer the freehold into the name of the leaseholders’ company and registered at Land Registry.

How SLC Solicitors can assist you

If you are a freehold owner served with a collective enfranchisement action we can assist in making sure the procedure has been correctly followed and the claim is valid or advise you to dispute the claim.

If you are a part of a group of leaseholders we can act for you in making the claim and act for you in extending your leases once you have purchased the freehold.

Analise Broomhall
Head of Property/Solicitor
  • Phone: 01743 260145
  • Email: adb@slcsolicitors.com
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