If you own a leasehold flat, you may have come across the term leasehold enfranchisement. It might sound complicated, but it’s essentially about giving leaseholders more certainty and control over where they live.
Thinking about buying the freehold of your building with your neighbours? This guide breaks down what leasehold enfranchisement involves, how the process works, and what to expect along the way.
What is leasehold enfranchisement and how does it work?
Leasehold enfranchisement is the legal right for leaseholders to buy the freehold of their building. When this is done by a group of leaseholders in the same block, it’s known as collective enfranchisement.
In most leasehold arrangements, you own your flat for a fixed number of years, but not the land the building stands on. That belongs to the freeholder. While this setup is common, it can come with limitations. Over time, the lease shortens and may affect the property’s value. There can also be costs like ground rent and restrictions around maintenance or subletting.
By buying the freehold through collective enfranchisement, leaseholders can:
- Extend their leases more affordably
- Have a say in building management and maintenance
- Avoid paying ground rent
- Potentially make the property more appealing when it’s time to sell
For many leaseholders, it’s a step toward more control and long-term peace of mind.
Related: What is a rental guarantor, and why do you need one?
The step-by-step legal process of leasehold enfranchisement
While the leasehold enfranchisement process involves a few legal and financial steps, it’s manageable with the right advice. Here’s how it works from start to finish.
Check eligibility
To start the collective enfranchisement process, the building must meet certain conditions:
- It must contain at least two flats
- At least 50 percent of the flats must be participating leaseholders
- At least two-thirds of the flats must be on long leases (more than 21 years when granted)
- No more than 25 percent of the internal space should be non-residential
If these apply and enough neighbours are on board, the process can move forward.
Related: Joint tenancies explained
Instruct professionals
You’ll need to appoint a solicitor who specialises in leasehold enfranchisement and a surveyor to carry out a valuation of the freehold. This is a key step in working out how much the freehold is likely to cost.
The surveyor will consider factors like:
- Length of the leases
- Current ground rent
- The market value of each flat
- How much value enfranchisement would add
It’s worth getting quotes in advance so you and your neighbours can plan for the overall cost.
Related: What is ground rent?
Set up a company
While not essential, many leaseholders choose to form a Right to Enfranchise (RTE) company. This helps manage decision-making and holds the freehold title if the purchase goes ahead. Each leaseholder becomes a shareholder in the company.
It also gives structure to collective decisions such as appointing managing agents or budgeting for future works.
Serve the initial notice
Your solicitor will prepare a formal document called a Section 13 notice, which is sent to the freeholder. This notice outlines your offer and confirms that you meet the legal requirements.
The freeholder has two months to respond. If they accept the offer, the process continues. If they serve a counter-notice, negotiations begin. If no reply is received, you may be able to apply to the tribunal to proceed.
Negotiate and agree terms
Most enfranchisement cases involve some back-and-forth negotiation on price and terms. Your surveyor will help ensure the final price reflects a fair valuation.
If an agreement cannot be reached, the First-tier Tribunal (Property Chamber) can settle the matter. However, in many cases, things are resolved without needing a formal hearing.
Complete the purchase
Once a price is agreed, your solicitor will handle the legal conveyancing. The funds are transferred, and the freehold is registered with the Land Registry.
After this, the leaseholders become the new freeholders, either directly or via the RTE company. From here, you can choose how to manage the building and make decisions as a group.
Is enfranchisement the right move?
Every situation is different, but for many leaseholders, enfranchisement offers more control over costs and property management. According to Zoopla, flats with a share of freehold are often more attractive to buyers, and extending leases is easier and more cost-effective once the freehold is owned collectively.
It’s not always a quick process, and costs can vary, but it’s worth exploring if you’re thinking long term.
Things to keep in mind
- Talk to your neighbours early to build interest
- Get quotes for legal and valuation work before serving notice
- Understand your rights and responsibilities after purchase
- Be prepared for ongoing building management and maintenance decisions
While collective enfranchisement can feel like a big step, it can also be a valuable investment in the future of your home. If you have any questions or need support with leasehold matters, contact your local Ellis & Co branch – our team is here to help.
