Should You Buy the Freehold of Your Home?

Key points:

Owning your home on a long lease gives you security for the term of that lease, but it is not the same as owning the land beneath it. As the lease shortens, the financial and practical consequences can become serious: lenders commonly require at least 75 years remaining before they will advance a mortgage, and a short lease will reduce the pool of buyers. For most leaseholders of houses, and for groups of flat owners acting together, Parliament has created a statutory right to buy the freehold at a price set by law rather than by whatever the freeholder demands. That right has become more accessible following the Leasehold and Freehold Reform Act 2024 (LFRA 2024), which received Royal Assent on 24th May 2024 and has already commenced several reforms.

The decision depends on the length of your lease, the type of property, the likely premium, and your plans for the property. What is clear is that delay almost always increases the cost, because the statutory formula produces a higher figure as the remaining term reduces.

Your Statutory Rights to Enfranchise

Houses: the Leasehold Reform Act 1967

Leaseholders of houses on long leases have the individual right to buy the freehold under the Leasehold Reform Act 1967. Before 31st January 2025, qualifying required at least two years of ownership. Section 27 of the LFRA 2024 abolished that waiting period. The change applies to all qualifying tenants who are registered at Land Registry as owner of the property; there is now no minimum ownership period before you can serve a notice of claim. To qualify, your lease must have been originally granted for more than 21 years and you must occupy the house as your main residence.

Flat Leaseholders: Individual and Collective Rights

Tenants of long leases of flats can extend their lease individually under the Leasehold Reform, Housing and Urban Development Act 1993. Under the current rules, a statutory extension adds 90 years to the unexpired term at a peppercorn ground rent. The LFRA 2024 will raise that to 990 years once the relevant provisions are commenced, but that change is not yet in force. The same abolition of the two-year rule applies: since 31st January 2025, a qualifying flat tenant can serve a notice of claim as soon as their Land Registry registration completes.

Where at least two-thirds of the qualifying long leaseholders in a building wish to act together, they can collectively purchase the freehold under the 1993 Act, provided at least half of the leaseholders in the building participate. Alternatively, under the Commonhold and Leasehold Reform Act 2002, qualifying leaseholders can exercise the Right to Manage their building without purchasing the freehold. From 3rd March 2025, section 49 of the LFRA 2024 raised the non-residential limit for Right to Manage claims from 25% to 50% of total internal floor area, bringing many more mixed-use buildings within scope.

How the Premium Is Calculated Now

The premium payable to your freeholder is not a matter of pure negotiation. It must reflect a statutory valuation formula, and if the parties cannot agree, either can apply to the First-tier Tribunal (Property Chamber) for a determination.

The formula has three main components. The first is the capitalised value of the ground rent income the freeholder loses. The second is the reversion value, representing the present value of the freeholder's right to receive the property back at the end of the lease. The third is marriage value, which arises because a short lease is worth less on the market than a long one: when the leaseholder buys the freehold or extends, that gap in value is corrected and split with the freeholder. Marriage value is payable only where the unexpired term is under 80 years, but once the lease crosses that threshold, the premium can increase substantially.

Suppose a Solihull leaseholder owns a flat worth £250,000 with 78 years remaining and a modest ground rent. Under current rules, marriage value must be shared with the freeholder, and the premium could run to several thousand pounds more than it would if the lease had 85 years remaining. Had that leaseholder sought advice and acted two years earlier, the additional cost would not have arisen.

The LFRA 2024 abolishes marriage value entirely under section 9, but that provision has not been commenced. The High Court dismissed a challenge to the abolition in October 2025, but the Court of Appeal granted permission to appeal in April 2026 and a full hearing is expected in late 2026. The government has indicated it will not commence the marriage value and wider valuation reforms while that appeal proceeds.

Professional costs form a significant part of the total expense. Both sides will typically instruct surveyors with enfranchisement expertise, and the statute requires the leaseholder to meet the freeholder's reasonable costs as well as their own. A specialist enfranchisement solicitor on your side will help ensure the correct premium is paid and that the transfer documentation is properly prepared. Our conveyancing solicitors in Solihull advise on these transactions regularly and can coordinate the valuation and legal steps.

Ground Rent on New and Existing Leases

The Leasehold Reform (Ground Rent) Act 2022 came into force on 30th June 2022 (and 1st April 2023 for most retirement homes). Any new regulated long residential lease granted on or after those dates may charge no more than a peppercorn ground rent, meaning zero financial value. This does not affect leases granted before those dates, so existing leaseholders with annual ground rent obligations continue to face those charges until they extend or enfranchise.

If you are buying a new-build property today, the ground rent position should be peppercorn from the outset. For anyone buying an older leasehold property, checking the ground rent terms and the remaining lease length should be an early priority in the conveyancing process. Where a dispute arises about whether a ground rent term is lawful, the First-tier Tribunal can make a declaration, or a solicitor experienced in property dispute resolution can advise on the most proportionate route.

Building Safety Protections for Flat Owners

For leaseholders in taller blocks, the Building Safety Act 2022 introduced protections directly relevant to any decision about freehold purchase or lease extension. Since 28th June 2022, qualifying leaseholders in buildings above 11 metres or with five or more storeys have significant protection from the costs of remediating historical fire safety defects, including unsafe cladding. To be a qualifying leaseholder, the property must have been your only or principal home on 14th February 2022, or you must have owned no more than three UK residential properties in total on that date. These protections transfer automatically to subsequent buyers of the lease.

If your building has outstanding safety defects and you are considering collective enfranchisement, taking legal advice on the building's remediation position before proceeding is important, because the liability position of the freehold owner may affect the terms of the transaction.

Frequently Asked Questions

Has the two-year ownership rule been abolished?

No. Since 31st January 2025, the two-year ownership requirement has been abolished for house enfranchisement under the Leasehold Reform Act 1967 and for flat lease extensions under the Leasehold Reform, Housing and Urban Development Act 1993. You must be registered at Land Registry as the owner before serving a notice of claim, but there is no minimum period of ownership.

Is marriage value still payable on enfranchisement?

Yes, under the current rules. The Leasehold and Freehold Reform Act 2024 abolishes marriage value, but that provision is not yet in force. Marriage value applies only where the unexpired lease term is under 80 years and can significantly increase the premium. A Court of Appeal challenge to the abolition is pending with a hearing expected in late 2026.

Can flat owners buy their freehold collectively?

Yes, provided at least two-thirds of the qualifying leaseholders hold long leases and at least half participate in the claim, under the Leasehold Reform, Housing and Urban Development Act 1993. Where flat owners prefer not to buy the freehold, the Right to Manage under the Commonhold and Leasehold Reform Act 2002 gives them control over building management without a purchase.

What if my freeholder demands an excessive price?

Your freeholder cannot refuse to sell once a valid notice of claim is properly served. If the parties cannot agree the premium, either side can apply to the First-tier Tribunal (Property Chamber) for a determination. The Tribunal is accessible and relatively informal; costs are not routinely awarded against the losing party. Instructing a specialist surveyor before you serve the initial notice gives your opening position the strongest foundation.

What problems does a short lease cause?

A lease with fewer than 75 to 80 years remaining will often be refused by mortgage lenders, which sharply reduces the number of buyers who can purchase with a mortgage. As the term drops further, the property may become difficult to sell at all. This is one of the strongest practical reasons to seek enfranchisement or a lease extension before reaching that point, rather than waiting until you are under pressure to complete a sale.

About the Author

Mark Stockton (SRA number 122231) is a Consultant Conveyancing Solicitor at Pearcelegal, advising on residential conveyancing and commercial property transactions across Solihull, Birmingham, Coventry, Sutton Coldfield and Warwick. Admitted in 1983, Mark ran his own firm, Anthony Stockton Solicitors, from 1999 until joining Pearcelegal in July 2020 to focus on client work. He is regulated by the Solicitors Regulation Authority (SRA ID 122231).

Last reviewed: 8th June 2026