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If you want to buy the freehold – the basics

A lease means you own a property for a fixed period of time. If you own the freehold, it could increase the value of your home and give you more control over its management. For example, managing repairs or alterations.

You can ask the landlord if they’ll sell you the freehold, but you might also qualify for the right to buy it. This right is known as ‘collective enfranchisement’.

If you qualify, you have to buy the freehold together with the other leaseholders. There are few reasons why the landlord can refuse to sell. However, there are legal steps and time limits involved. Once sold, you will own a share of the freehold with the other leaseholders.

Qualifying for the right to buy the freehold - enfranchisement

To qualify, you and the other leaseholders need to meet certain conditions, including:

• you hold a ‘long lease’, usually this means it was originally granted to last more than 21 years
• you don’t own more than two flats in the building
• the number of leaseholders who agree to buy the freehold is no less than half the number of flats in the building

If you bought your home though a shared ownership scheme, you must buy the remaining shares in it before you can buy the freehold.

Your building also needs to meet certain conditions, including:

• it contains at least two flats
• at least two-thirds of the flats are owned by qualifying leaseholders
• no more than 25 per cent of the building is used for commercial purposes – for example, a shop

Exceptions

Even if you qualify, there are times when you and the other leaseholders can’t buy the freehold. For example:

• in certain circumstances where the National Trust or a charitable housing trust own the freehold
• your landlord can prove to the court that they plan to redevelop your building
• you have a business lease

Download the guide ‘Collective enfranchisement – getting started’ for the full conditions and exceptions.

• Download 'Collective enfranchisement - getting started' (PDF, 250K) Opens new window

Costs when buying the freehold

You have to buy the freehold from the landlord. It’s difficult to value and you’ll have to negotiate on the price. Get a professional valuer to work out how much it’s worth.

If you and the landlord can’t agree on the price, you can appeal to the Leasehold Valuation Tribunal (LVT). This is an independent legal body that can settle certain types of leasehold dispute without the need to go to court.

You usually have to pay your landlord’s legal costs for dealing with the sale, even if it falls through. You can appeal to the LVT if you think these are ‘unreasonable’.

• Leasehold Valuation Tribunals - information from Ministry of Justice Opens new window

Getting help and advice about enfranchisement

Get a professional to help you buy the freehold. They can also advise you on the benefits of buying the freehold, check that you qualify and deal with the legal paperwork.

You can get free advice from the Leasehold Advisory Service or Citizens Advice.

• Find your local Citizens Advice Bureau

• Leasehold Advisory Service - online enquiry form

• Leasehold Advisory Service (LEASE)

Steps to buy the freehold

The basic steps are shown below. Download the guide ‘Collective enfranchisement – getting started’ for more detail.

Step one – getting organised

If the sale falls through, you won’t be able to buy the freehold for the next 12 months.

To help manage the sale, you need to choose a ‘nominee purchaser’ who will own the freehold and be the main contact for dealing with the sale. It can be a person, group of people or company.

Many leaseholders set up companies or sign ‘participation agreements’ with each other to help things run smoothly. For example, to make sure the money is organised and agree what to do if someone pulls out (withdraws).

Step two – making an offer

Your offer is known as a ‘Section 13 Notice’ and should be signed by all the leaseholders buying the freehold. It should confirm things like:

• you qualify for the right to buy the freehold
• the price you want to pay for the freehold
• the nominated purchaser
• a date for the landlord to respond, they must have at least two months

Step three – the landlord’s response

The landlord’s response is known as a ‘Counter Notice’. The landlord can:

• accept your offer
• suggest different terms – for example, price
• not respond
• challenge your right to buy the freehold

If the landlord doesn’t respond, you can ask the court for permission to buy the freehold. You should do this within six months of the deadline in your Section 13 Notice.

The landlord can sometimes challenge your right to buy the freehold in the courts. For example, if a notice is invalid, the building doesn’t qualify or they can prove that they plan to redevelop the building.

Step four – agreeing the price and completing the sale

You may need to negotiate terms, for example, the price or conditions of the sale. If you can’t reach an agreement, you can ask the LVT to settle the dispute.

You must sign a formal contract for the sale within two months of the terms being agreed. If you haven’t, you can ask the court to settle the dispute.

• Download 'Participation agreements when buying the freehold - a guide' (PDF, 200K) Opens new window

More useful links

• Planning for buying a home