Buying the freehold of a house
This content applies to England only.
Housing laws vary between England and Scotland. Get advice relating to Scotland
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.
If your lease covers only part of a converted house (such as a flat or maisonette) the rules are different - see the page on buying a share of the freehold for more information.
What are the 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 will probably increase 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.
Do I have the 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.
How does the process work?
Buying the freehold (enfranchisement) can be a very complicated process. The basic steps are explained below. This is only an introduction to the procedure you will have to follow. You will probably need a solicitor to do the legal work. More information is available from the Leasehold Advisory Service. You may also be able to get help from a Shelter advice centre or Citizens Advice in your area. Use the Advice Services Directory to find one.
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).
Once the initial notice has been given, you become responsible for the freeholder's legal costs. 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. S/he can only refuse if:
- s/he needs the property for her/himself or a member of her/his family
- s/he is going to demolish or redevelop the property.
In either case, the freeholder has to get a court order to get you to leave and will have to pay you compensation. If you are in this situation, get advice.
If the freeholder refuses for any other reason you can apply for a court order to force her/him to sell you the freehold. 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 s/he agrees 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.
How much will it cost?
There is no easy way to work out how much you might have to pay for the freehold. You will need to get a valuation to work out approximately how much the freeholder will expect.
It is almost impossible to work out a fixed price, so most valuers will give you a high and low price. The final price should be somewhere in between but you may still have to negotiate. You'll also have to 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, so you should get advice before making a decision.
What if I think the price is too high?
If you think the price being asked is too high, get advice. A leasehold valuation tribunal may be able to decide whether the price is fair. If you still can't afford to buy the freehold you have to tell the freeholder. You will then have to wait twelve months before you can apply again.