As a leaseholder, you may have the right to buy all or part of the freehold to your home. You may also have to right to stop the freeholder from selling the freehold to someone else. The rules about how and when you can buy the freehold differ depending on whether your home is a house or a flat. The legal process (known as enfranchisement) is usually more complicated for flat owners. Buying the freehold is completely different to house conveyancing, although licensed conveyancers can still guide you through the process.
Buying the freehold of a house
This content applies to England only. 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 one part of a converted house (such as a flat or maisonette) the rules are different. See below 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.
Buying the Freehold
If you own a leasehold flat you may have the right to buy a share of the freehold of your building. You have to get together with other leaseholders to do this (collective enfranchisement). There are rules about which leaseholders can buy the freehold and how the process works. If your lease covers the whole house (whether it has been converted into flats or not) the rules are different.
Am I eligible?
Not all flat owners have the right to buy a share of the freehold. There are rules about who qualifies and which properties are eligible. Your lease must have originally been granted for at least 21 years or contain a special clause which says that it can be renewed indefinitely. It is no longer necessary to have lived in the property for a specific amount of time. However, even if this is the case, you may not eligible if:
- You have a business lease
- You have a lease on more than two flats in the building
- The freeholder is a charitable housing trust, the National Trust, the Crown or the Church of England.
There are a few other exclusions. For example, if your flat is in a house that was converted by the freeholder and s/he (or an adult member of her/his immediate family) has lived in one of the flats for at least the last 12 months, the leaseholders probably can’t buy the freehold.
Does my building qualify?
There are also rules about the types of buildings that can be bought. Your building will probably qualify if:
- It is self-contained and contains two or more flats, and
- At least two-thirds of the flats are owned by leaseholders
- No more than 25 per cent of the building is used for business purposes.
In most cases, the leaseholders who buy the freehold must own at least half of the total number of flats in the building. If there are enough leaseholders in the building but some of them don’t want to take part, they don’t have to.
If you intend to buy the freehold for you property, you won’t face the same conveyancing costs as house conveyancing, but you will face other legal fees. Legal advice is always advisable, but you can approach licensed conveyancers like Express Conveyancing too. We are countrywide conveyancing solicitors with many years of experience in helping purchasers to buy their freehold.
Find out today how we can help you buy the freehold to you property by requesting a free call-back from one of our experienced licensed conveyancers.