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Solicitors Specialising in Purchasing the Freehold of Leasehold HousesPurchasing the Freehold of a House. Logo of ALEP - the Assocaition of Leasehold Enfranchisement Practitioners

Leasehold Houses Update: The Leasehold and Freehold Reform Act 2024 was passed by the UK Parliament on 24 May, 2024. It confirmed the government’s plan to ban the creation of new leasehold houses – the result of which would be in future all houses would be sold with freehold not leasehold title.But although passed, the Act is not yet in force and may not come in until 2025 or later.
Click here to read our Leasehold Reform Latest News

Applications to buy the freehold of a house (also known as house enfranchisement) are much, much less common than flat leasehold extensions or collective enfranchisement claims (where groups of leaseholders come together to buy the freehold for an entire block of flats).

Why? The simple reason is that leasehold houses are still relatively unusual. Compared with flats which are almost always sold on a leasehold basis, the vast majority of houses are freehold. However controversially, some of the big property developers have been selling an increasing number of houses on a leasehold basis – and although the government have vowed to prevent this, no positive plans have been set to achieve this.

N.B. This page deals with the freehold purchase of leasehold houses. Click here you’re interested in finding out more about the  lease enfranchisement of a block of flats

Got a question about buying the freehold of your house? Call our expert team on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached

How many leasehold houses are there in the UK? They are more common than you might expectHouse Enfranchisement. photo of semi-detached house

You might be surprised to find out how many leasehold houses there are in the UK. Many, possibly most, people think of houses as freehold, and flats as leasehold. But the latest statistics tell a different story.

According to a Leasehold and Commonhold reform Research Briefing  published by the UK government on September 22, 2023, the Ministry for Housing, Communities and Local Government  estimates there are around 4.98 million leasehold homes in England, of which 70% are flats and a staggering 30% are houses. That’s about 1.4 million leasehold houses – about 8% of housing stock in England.

But government statistics show that the proportion of new-build houses sold as leasehold is rapidly declining. It climbed from 7% in 1995 to reach a high of 15% in 2016. But, according to 2019 Land Registry data just 6% of houses in England and Wales were sold on a leasehold basis. And according to the government, that percentage has now significantly reduced, dipping to just 1% in March 2022.

But there are still huge number of leasehold houses – and many people would be much better off buying freehold and properly owning their own house.

And in some parts of the country leasehold houses are really quite common.  For example, 27% of houses sold in the North West of England  in 2018 were leasehold.

UPDATE – Persimmon leasehold houses concession

June 23rd, 2021, saw major UK homebuilder, Persimmon plc, reduce the price they been charging owners of leasehold houses to buy their own freehold from £3750 to £2000- and offer a refund of £1750 to all of those who previously paid a higher premium to buy that freehold.
Click here to read more about how to Buy your Persimmon Freehold or claim your refund.

What about the other developers?

Gradually, and this is probably not unconnected with the ongoing investigation by the Competition and Markets Authority, some of the largest house builders and other major freehold owners have shifted their position.

For example Countryside Properties promised to maintain ground rents at the same level as when they first purchased their home.

And in addition, 4 more national developers – Redrow, Crest Nicholson, Miller Homes and Vistry have all agreed to make similar beneficial changes and/or to work with the companies who purchased their freeholds to remove terms in relevant leases doubling ground rent every 10 years.

Freeholders D.A.T.S. (Holdings) Limited and Wallace Estates Limited also provided the CMA with similar promises to make changes for the benefit of those owning their leasehold houses.

And Aviva, which doesn’t build homes but does buy freeholds from developers, promised to reimburse owners of leasehold houses who had seen their ground rents double. The petition watchdog also investigated a number of other investment groups including Abacus Land and Adriatic Land and Brigante Properties.

I want to purchase the freehold of my house – do I really need a specialist solicitor?

Absolutely. The vast majority of conveyancing lawyers rarely come across lease extensions let alone collective enfranchisement – and they’ve probably never come across a single example of exercising the right to buy the freehold of a leasehold house. And the law and procedure regarding house enfranchisement is tricky – so you definitely need an experienced expert.

How can you identify genuine specialist?

Well, firstly we are long-standing members of ALEP, the Association of Leasehold Enfranchisement Practitioners.

Secondly, we are the only law firm recommended by HomeOwners Alliance for freehold purchase work.House Enfranchisement. Logo of HomeOwners Alliance

What’s more, our specialist five strong leasehold team does nothing but lease extension and enfranchisement cases for clients throughout England and Wales. That means we have plenty of experience of house enfranchisement –and that includes both houses which were sold as leasehold in the past, as well as the more recent wave of recently constructed leasehold houses built by the likes of Persimmon, Redrow and Taylor Wimpey Homes.

So you know that when instructing us, you can rely on the specialist expertise of our freehold solicitors.

Purchasing the Freehold  of Your Leasehold House – Your Right?

If you do own a leasehold house in England or Wales, then you could  have the legal right to buy the freehold of your house – a process is known as lease enfranchisement – if the freeholder decides to sell it, or when you tick all of the legal boxes needed to exercise your right for enfranchisement.

Buying my Freehold – When is a house a house?

That may sound a really odd question, but over the years, the definition of a house has changed – and in fact,  has widened. When it comes to freehold purchase a house can be one of many things – a pub with accommodation upstairs, a shop with a flat, offices with a flat, a block of flats – as well as your standard house.

Legislation dealing with freehold purchase has been around since the late 1960s, but there are still regular cases brought to court in an attempt to define what is and is not a house. The first thing you need to do therefore is for your solicitor to ensure your property is indeed a house under the legal definitions.

One point to note is that in order to be classed as a house, there must be no material under-hang or over-hang with an adjoining building. If there is, your property is likely to be classed as a flat.

House Enfranchisement – do I qualify?

In order to buy your freehold, you must have owned the lease of the house concerned for at least two years. However it is possible for you to avoid that two-year ownership requirement if , when you buy the house, the vendors have owned it for 2 years already and they put the initial application for enfranchisement in while still owning the property (there is no cost to them at this stage) then transfer the benefit of that application over to you on completion. If you are thinking of going down that route – our team can help you.

Provided that your lease covers the whole house, there is no longer any issue with residential leaseholders having to have actually lived in the house at all.

If the house is occupied on a split tenancy (such as a shop at street level with a separate flat above), then the leaseholder must have lived there for two years out of the previous ten.

In the case of the leaseholder being deceased, then their representatives now have been granted limited enfranchisement rights.

NB Bear in mind there are 2 options to buy your freehold. The statutory or formal route has a particular procedure and has that two-year ownership rule. The alternative is the informal or voluntary route, under which you can agree a price directly with the freeholder and you don’t need to go through any particular procedure have owned the property for 2 years. The former is your right and in general terms the freeholder cannot refuse. The informal route, in contrast however, is entirely voluntary and the freeholder could pull out at any stage or change the terms of the deal.

House Enfranchisement – Is the lease eligible?

In short, the right to buy your freehold is only available if your lease must was originally granted for a term of at least 21 years – which is often referred to as “long leasehold”.  So the right to buy your freehold doesn’t apply if you only have say a monthly or yearly tenancy.

Are any houses excluded from the right to enfranchise?

Yes – and among the types of houses which do not qualify for freehold purchase are hostels, and houses let out by charitable housing trusts

6 Steps to start the enfranchisement process

The actual process of purchasing the freehold of a house is much more straightforward than collective enfranchisement – simply because, like lease extension, you are the only leaseholder involved and you’re not dependent on the cooperation of other leaseholders. In other words, you’re in complete control

  • Step one is to instruct a solicitor with plenty of experience of house enfranchisement.
  • Step two – find a surveyor who specialises in the valuation of leasehold extensions and freehold purchase. We can help you as part of our one-stop shop. We have a nationwide panel of surveyors who we work with regularly and who we trust to provide the specialist valuation you’re going to need. Please note that only a relatively small number of surveyors have this experience. So again be very careful who you choose.
  • Step three – provide your chosen solicitor with all the blend information about you, your circumstances and the lease.
  • Step four –  your solicitor will serve the “initial notice” on your freeholder. This is a legal document formally letting your freeholder know that you want to buy your freehold and start the formal process.
  • Step five – once the freeholder has received the initial notice, they have two months in which to respond with a formal reply called a counter notice.
  • Step six- once the counter notice has been received, your solicitor and surveyor can then start negotiating on your behalf about the price and any other conditions

House Enfranchisement – the importance of strict deadlines

Throughout the freehold purchase process there are strict deadlines which have to be met. Missing them, and that’s a common mistake that inexperienced solicitors make, means that you run the risk of having to start the process again from the beginning, with all the added delay and additional legal costs and stress that brings.

What will happen if I don’t extend the lease or purchase the freehold of my leasehold house ?

You never really own a leasehold house – you simply pay for the right to live there for a while.

And that means that when your lease term expires, you lose all rights to occupy your house – which returns to the ownership of your freeholder.

And, to make it worse, when your lease expires, you also lose your legal right to purchase the freehold extend your lease.

And that’s the reason why it is so critical to buy your freeholder extend your lease before it expires.

The 5 Main Benefits of Purchasing the Freehold of  a Leasehold House

There are many benefits in purchasing the freehold of your house.

1.      No More Ground rent: Once you own the freehold, you no longer have to pay any annual ground rent. This is particularly important if your lease provides for significant regular increases in the ground rent you are due to pay

2.      Increased Control: Owning the freehold gives you much more scope to make repairs and maintain your property as and when you wish. As there is no longer a freeholder involved, you don’t need to pay a service charge, or ask their permission to make changes or improvements to your home. Although this is an added chore, you may find that given the incentive of having to pay the bill yourself, you can lower the cost of good quality regular maintenance substantially

3.      Easier to get a mortgage. An increasing number of lenders are either refusing mortgages for these kind of properties entirely, or imposing strict criteria. For example in 2017, the Nationwide, one of the UK’s biggest lenders, said that it would no longer lend on any leasehold property where the ground rent was set to double every 5, 10 or 15 years.

4.      Increased Value: A freehold house is simply worth more the leasehold house, and also will be far more appealing to buyers. Most buyers prefer freehold houses and many will not even consider buying a leasehold house.

5.      Peace of Mind : One of the biggest advantages of owning the freehold is security. If you occupy on a leasehold basis you’ll never own your home outright, and even if you have paid off the mortgage on your house there is still the risk you could be evicted. If you buy the freehold it provides better peace of mind, as you’ll only be evicted if you stop paying the mortgage.

House Enfranchisement – Getting the Right Valuation

This valuation of the premium required to buy the freehold of your house is similar to a collective enfranchisement valuation which applies to blocks of flats.

In particular once your lease term drops below the 80 year point, an additional premium known as “marriage value” is payable to your freeholder. This means that you’re well advised to start the enfranchisement well before the lease term drops below 80 years –  because the very moment the lease drops below the crucial 80 year point, you will have to pay more to buy your freehold.

House Enfranchisement – How long will it take?

The length of time it takes to buy the freehold of a leasehold house is often dictated how cooperative the freeholder is. However, in general terms, assume it will probably take between 6 and 12 months from the date of your initial notice.

What happens if I cannot agree with the freeholder over the price?

As with the freehold purchase of a flat, if you and your freeholder simply can’t agree on the right premium to be paid, or you disagree on the level of your freeholder’s reasonable legal and valuation costs, then the matter can be resolved by the First-Tier Property Tribunal (previously known as the Leasehold Valuation Tribunal or LVT).

Considering Lease Enfranchisement? Make an enquiry with us today.

Our expert team have already helped thousands of people like you with their freehold purchase and lease extensions. We can help you too in buying the freehold of your block wherever you live in England and Wales. We don't even need to see you, taking your instructions by e-mail, phone and Skype video or FaceTime.

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