Leasehold enfranchisement

Leasehold enfranchisement is a general term used to describe certain statutory rights available to residential leaseholders.

If you own a leasehold house, you may have the right to extend your lease or acquire the freehold of your house. If you own a leasehold flat, you may have the right to extend your lease individually or, together with other leaseholders in the building, acquire the freehold through collective enfranchisement.

Collective enfranchisement allows qualifying leaseholders in a building to join together to purchase the freehold. This is a statutory right, and provided the relevant qualifying criteria and statutory requirements are met, the freeholder will be compelled to sell the freehold.

Owning the freehold can give leaseholders greater control over the management and future of their building. Participating leaseholders will also often extend their leases following completion of the acquisition.

A statutory lease extension gives a qualifying leaseholder the right to extend the term of their existing lease by 90 years and reduce the ground rent to nil, in return for payment of a premium.

As this is a statutory right, provided the relevant qualifying criteria and statutory requirements are met, the freeholder can be compelled to grant the lease extension.

A lease extension increases the length of an existing lease but does not change ownership of the freehold.

Collective enfranchisement involves leaseholders joining together to acquire the freehold itself.

Eligibility depends on a number of factors, including the nature of the building, the number of qualifying leaseholders and the extent to which the building is used for non-residential purposes.

Generally, you will qualify if you own a lease of a “flat” which was originally granted for a term of more than 21 years, although there are exceptions.

No. There is no minimum ownership period for participating in a collective enfranchisement claim.

Since 31 January 2025, there is also no minimum ownership period for making a statutory lease extension claim.

No. Provided the statutory participation requirements are met, it is not necessary for every leaseholder in the building to take part. Generally, at least 50% of the flats in the building must participate in the claim.

Whether a particular building qualifies will depend on the extent of its non-residential use and its physical and legal characteristics.

See flowchart

See flowchart

The collective enfranchisement and lease extension processes contain a number of strict deadlines. Missing one can have serious consequences and, in some circumstances, may result in your claim being treated as withdrawn. It is therefore important to take specialist legal advice throughout the process.

If you are concerned that a deadline has been missed, speak to our enfranchisement team at Forsters as soon as possible so that we can advise on the consequences and any options that may still be available.

Timescales vary considerably but a straightforward claim can still take up to 12 months from the initial preparation through to completion.

The premium will depend on the building and the length and terms of the leases.

In addition to the premium payable for the freehold, leaseholders will need to budget for their own legal and valuation fees, as well as certain professional costs incurred by the freeholder.

The premium payable will depend on the property, the remaining length and terms of the lease.

In addition to the premium payable for the lease extension, a leaseholder will need to budget for their own legal and valuation fees, as well as certain professional costs incurred by the freeholder.

Yes. We strongly recommend obtaining a valuation from a surveyor specialising in leasehold enfranchisement before starting a claim. Your valuer will advise on the likely premium and the figure to include in the initial notice, and will usually conduct the subsequent valuation negotiations with the landlord’s surveyor.

We work closely with a number of specialist enfranchisement valuers and can recommend someone suitable if required.

The 80-year threshold is important because, under the current law, marriage value becomes payable once a lease has 80 years or less remaining. This can significantly increase the cost of a lease extension or collective enfranchisement claim.

Shorter leases can also become more difficult to sell or mortgage, so you should take advice well before your lease approaches the 80-year threshold.

A disagreement over the terms of the claim, usually the premium, does not necessarily prevent it from proceeding. If agreement cannot be reached within the statutory timetable, an application can be made to the First-tier Tribunal to determine the premium and any other terms that remain in dispute.

The freehold is acquired by a nominee purchaser on behalf of the participating leaseholders. In many cases, a company is established for this purpose, with the participating leaseholders becoming members of that company. The appropriate ownership structure should be considered at an early stage as part of the planning for the claim.

Following completion, responsibility for the freehold and, in many cases, the management of the building will pass to the leaseholders’ nominee purchaser. The leaseholders will therefore need to consider how the building will be managed going forward, including whether to appoint professional managing agents.

The existing leases do not automatically disappear when the freehold is acquired.

However, one of the advantages of collective enfranchisement is that participating leaseholders will often be able to extend or otherwise vary their leases following completion, subject to the circumstances of the building and the interests of the participating leaseholders.

This can help address concerns about lease length and improve the future marketability of the flats.

Yes. Following a successful collective enfranchisement claim, participating leaseholders can usually grant themselves new leases on favourable terms, helping to protect the long-term value and marketability of their properties.

For many leaseholders, acquiring the freehold can be a worthwhile investment. It can provide greater control over management of the building, make future lease extensions easier to arrange and enhance the property’s long-term appeal to buyers and lenders.

However, owning the freehold also brings responsibilities. The leaseholders will need appropriate arrangements for managing the building and dealing with matters such as repairs, insurance and service charges.

Whether collective enfranchisement is the right option for you will depend on the circumstances and objectives of the leaseholders involved.

In many cases, yes. A longer lease can improve the marketability and mortgageability of a property and protect its long-term value.

The shorter a lease becomes, the more important it is to consider the available options. A particularly short lease may make a property more difficult to sell or remortgage, so taking advice at an early stage is usually sensible.

Yes, although an ongoing claim can add some complexity to the sale.

Depending on the circumstances, it may be possible for the claim to continue alongside the sale or for the benefit of the claim to be passed to the buyer. It is important to take advice at an early stage so that the lease extension or collective enfranchisement claim can be coordinated with the sale.

If the landlord or freeholder cannot be found, it is still possible to pursue a collective enfranchisement claim or lease extension. However, a separate procedure applies and evidence will be required to show that reasonable steps have been taken to trace them.

Yes. Having a mortgage does not prevent you from obtaining a statutory lease extension and you do not need your lender’s consent to make a claim.

Yes. It may be possible to agree a lease extension voluntarily with your landlord without using the statutory procedure.

This can sometimes offer greater flexibility, but the terms offered by the landlord need to be considered carefully against the statutory alternative.

A good starting point would be to speak to our specialist enfranchisement team at Forsters. We can advise on the qualification criteria, explain the process and likely costs, and help you organise the claim.

We can also recommend specialist enfranchisement valuers to advise on the likely premium. Taking legal and valuation advice at an early stage can help ensure the claim is properly planned from the outset.

Yes. The law relating to leasehold enfranchisement is undergoing significant reform. The Leasehold and Freehold Reform Act 2024 contains a number of changes affecting collective enfranchisement andlease extensions but not all of these reforms are yet in force.

The position is continuing to develop, so it is important to take advice based on the law in force at the relevant time. You can follow the latest developments and key milestones on our leasehold reform timeline.