How Much Does It Cost to Convert Leasehold to Freehold?

Owning a property in the UK doesn’t always mean owning the land it’s built on. Many homeowners are surprised to learn they own a leasehold, not the freehold. But what exactly does that involve and what are the costs associated with turning a leasehold into a freehold?

This guide breaks down the costs, legal considerations, and benefits of converting leasehold to freehold, helping you make an informed decision.

1. What’s the Difference Between Leasehold and Freehold?

Leasehold: You own the property for a set number of years (e.g. 99 or 125 years), but not the land it sits on.

Freehold: You own both the property and the land it occupies outright, with no time limit.

Leasehold properties often come with ground rent, service charges, and restrictions on alterations or subletting. That’s why a growing number of leaseholders choose to secure full ownership by buying the freehold.

2. Average Cost to Convert Leasehold to Freehold

There isn’t a one-size-fits-all answer. The cost of converting leasehold to freehold depends on several variables:

Typical Cost Range:

• For a flat: £6,000 – £30,000+
• For a house: £3,000 – £10,000+

These figures include both the premium (purchase price) and associated legal and administrative fees.

3. Factors Affecting the Cost

Remaining Years on the Lease

The fewer years left, the higher the cost to purchase the freehold.

Once your lease drops below 80 years, marriage value kicks in—raising the amount you’ll need to pay the freeholder.

Ground Rent & Service Charges

Higher annual ground rent often leads to a higher freehold valuation.

Properties with high service charges may influence negotiations or valuations.

Market Value of the Property

The premium is often calculated based on a formula that includes the property’s current market value.

Negotiated Price or Tribunal Decision

You can try to negotiate the premium directly with the freeholder.

If an agreement isn’t reached, you can go to the First-tier Tribunal—but this may increase your legal expenses.

4. Breakdown of Potential Costs

Let’s look at what you may need to budget for when converting leasehold to freehold:

5. Converting Leasehold Flats vs Houses

Leasehold Houses:

• Eligibility typically falls under the provisions of the Leasehold Reform Act 1967.
• The process is relatively simple if you’ve owned the lease for at least 2 years.

Leasehold Flats:

• Must be done via collective enfranchisement—i.e., multiple leaseholders in the building buy the freehold together.
• Requires at least 50% of leaseholders to participate.
• You may need to set up a Right to Manage (RTM) company.

Also, learn about the How Much Does it Cost to Buy the Freehold of a Leasehold House

6. Do You Qualify to Buy the Freehold?

To be eligible to buy your freehold (individually or collectively), you generally need to:

• Own a long lease (originally granted for more than 21 years)
• Have held the lease for a minimum of two years.
• Live in a building that qualifies (e.g., not entirely commercial or with more than 25% non-residential use)

7. How the Process Works

Step-by-Step Overview:

• Instruct a qualified surveyor to value the premium.
• Send a formal notice to the freeholder.
• The freeholder can accept or negotiate the offer.
• Should negotiations fail, you have the option to escalate the matter to the First-tier Tribunal for resolution.
• Once agreed, complete the legal work and register the freehold with the Land Registry.

8.  Example Calculation (For Illustration Only)

Let’s say:

• Your flat is worth £300,000
• You have 85 years left on the lease
• Ground rent is £200/year

A typical premium might be around £9,000 – £12,000, plus £2,000 – £3,000 in legal and valuation fees.

When a lease falls below 80 years, the introduction of marriage value can cause a notable increase in the overall purchase cost.

9. Is It Worth Converting to Freehold?

Pros:

• No ground rent or restrictive lease terms
• Easier to sell or remortgage the property
• More control over maintenance (especially for houses)
• Increases long-term property value

Cons:

• Upfront cost can be high
• Collective enfranchisement can be complex
• Legal disputes may arise with the freeholder

In most cases, especially for long-term homeowners, buying the freehold is a wise investment.

10. Tips to Save on Costs

• Negotiate collectively (for flats) lower cost per unit
• Use a qualified valuer familiar with leasehold laws
• Get legal advice early to avoid disputes or delays
• Avoid letting the lease drop below 80 years to reduce added costs like marriage value

Conclusion: Know Before You Buy

Converting a leasehold to a freehold gives you greater control, peace of mind, and long-term savings but it comes with upfront costs. The total you’ll pay depends on lease length, ground rent, property value, and legal steps involved.

If you’re considering making the switch, speak to a qualified solicitor and surveyor to understand the cost implications for your specific case.

Early action especially before your lease term dips below 80 years can save you thousands in the long run.