Buying the freehold of a house

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 will 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.

How does the process work?

Buying the freehold (enfranchisement) can be a very complicated process. The basic steps are explained below.

You may need a solicitor to complete the legal work.

Find out more from the Leasehold Advisory Service.

Step 1: making an offer

The first step is to inform the freeholder that you want buy the freehold (the 'initial notice'). The notice is a legal document and has to contain:

  • your name and address
  • details of the property
  • the price you propose to pay (you can get a valuation to work this out)
  • a deadline for the freeholder's response (you must allow at least two months)

You become responsible for the freeholder's legal costs once the initial notice has been given. You have to pay them even if the sale falls though.

Step 2: the freeholder's response

The freeholder has to send you a reply ('counter notice') within two months, saying whether you have the right to buy the freehold.

The freeholder can only refuse if they need the property for themselves or for a member of their family, or if they plan to demolish or redevelop the property.

In either case, the freeholder has to get a court order to make you leave The freeholder must also pay you compensation. If you are in this situation, get advice.

You can apply for a court order to force the freeholder to sell you the freehold if they refuse for any other reason. You have to do this within two months from the date you receive the counter notice.

Step 3: negotiation

If the freeholder's counter notice says they agree that you can buy the freehold, there is usually a period of negotiation before the sale goes ahead. Most freeholders suggest changes to the conditions of the sale, which may include a higher price.

Once the conditions of the sale have been agreed, you have to sign a formal legal contract within two months.

Costs of buying the freehold

There is no easy way to work out how much you might have to pay for the freehold. You need to get a valuation to work out approximately how much the freeholder will expect.

It can be difficult to work out a fixed price. Most valuers give you a high price and a low price. The final price should be somewhere in between but you may still have to negotiate.

You must also pay all the solicitors' and surveyors' fees and legal costs (for both yourself and the freeholder), which can be expensive.

Buying the freehold is only an option if you can afford it. It 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 before making a decision, and find out more from the Leasehold Advisory Service.

Get advice if the price is too high

Get advice if you think the price being asked is too high. A Leasehold Valuation Tribunal may be able to decide whether 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.

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