Buying your Freehold – A Simple Example

Tuesday, 4th February 2020 | by: Matthew Price

We have previously covered worked examples of how a typical lease extension works but never freehold purchases (enfranchisements) as these are more complicated.

It shouldn’t really be this way, so this article will look at a typical scenario that Peter Barry encounters with a focus on simplicity.

Part 1 – The Basics

Of all the flat owners in your building, 50% will need to participate in the claim. If there are only 2 flats, both will need to participate.

You will need to cover the costs of those flats that are not involved, but this is at a reduced rate.

There is no 2 year ownership rule as there is in a lease extension

If the ground floor is commercial premises, this cannot be more than 25% of the overall internal area.

Part 2 – The Valuation

The amount each flat contributes is similar to what an individual lease extension would cost them. You can try our estimate calculator here.

As you will be acquiring the whole of the freehold there are parts of it that will attract value such as:

  • Loft spaces
  • Cellars (for conversion into basements)
  • Opportunities to add side/rear extensions
  • Opportunities to add parking spaces

These are referred to as development value. The cost of building will have to be greater than the build cost plus fees for it to contribute.

Valuation example

Part 3 – The Process

You will need to serve notice on the freehold with the help of a specialist solicitor.  Your surveyor will confirm a low offer to be inserted to allow for some negotiation room.

The freeholder will instruct their own surveyor and solicitor and 2 months later you will receive a counter-notice.

Negotiations typically take between 3 and 6 months.

If the price cannot be agreed, you can make an application to Tribunal but this mainly serves to encourage both sides to reach an agreement. Less than 2 % of applications ever end up going.

The benefits


Once the process is complete you will have complete control over the management of your block. If your numbers are small you can organise this between the leaseholders. If larger (5+) then you should consider instructing a managing agent.

Lease extensions

You can also take care of any short leases by extending them to 999 years for free.


If your freeholder has been blocking your extension (or asking for too much) you should find this much easier, now you are dealing with your fellow flat owners.

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