If you own a leasehold house you normally have the right to buy the freehold after you have owned the lease for at least two years. You have to pay for all of the legal fees involved.
Benefits of buying the freehold
Being a freeholder is more secure than being a leaseholder.
Buying the freehold may make it easier to sell your home and probably increases its value. This is because:
- freeholders have more control over the management of their homes
- most freeholders don't have to pay ground rent
- freeholders can normally only be evicted if they don't pay the mortgage or other secured loans
Right to buy the freehold
You can probably buy the freehold if:
- your lease covers the whole house (not just an individual flat or maisonette)
- the lease was granted to the original leaseholder for at least 21 years
- you have owned the lease to your home for at least two years (you don't have to have lived in the property during that time)
However, you may be excluded from buying the freehold if:
- the freeholder is a charitable housing trust
- the public has the right of access to your property
- the freehold includes adjoining property (such as farm land)
- you have a business lease (although there are some exceptions)
- you bought your home through a shared ownership scheme and have not yet bought the remaining shares in your home
The rules are different if your lease covers only part of a converted house (such as a flat or maisonette).
Find out more about buying a share of the freehold.
Costs of buying the freehold
You must get a valuation to work out approximately how much it costs to buy the freehold.
The valuation depends on how many years the lease has left, the ground rent and the current and previous value of the house.
You must also pay all the solicitors' and surveyors' fees and legal costs for both yourself and the freeholder.
Buying the freehold is usually more expensive than extending your lease and can be more complicated. Depending on your circumstances, extending your lease may be a better option.
Get advice if you think the price being asked is too high. A Leasehold Valuation Tribunal may be able to decide if the price is fair.
If you cannot afford to buy the freehold you have to tell the freeholder. You then have to wait twelve months before you can apply again.