How Many Leaseholders Are Required to Buy the Freehold

How Many Leaseholders are Required to Buy the Freehold?

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    Acquiring the freehold of a property can be a significant and beneficial move for leaseholders, offering greater control over the management and future of their homes. However, understanding the process and the number of leaseholders required to initiate this purchase is crucial. In this blog, we will explore the key aspects of buying the freehold, the legal requirements, and the benefits it can bring.

    Understanding Freehold Purchase

    Before diving into the specifics, it’s important to clarify what buying the freehold means. When leaseholders purchase the freehold, they collectively buy the ownership of the land and building(s) from the current freeholder. This process is often referred to as “collective enfranchisement.

    Legal Framework and Eligibility

    The right to collective enfranchisement is enshrined in the Leasehold Reform, Housing and Urban Development Act 1993. According to this legislation, the following conditions must be met :

    1. Qualifying Leaseholders: At least 50% of the leaseholders in the building must participate in the purchase. These leaseholders must hold long leases, typically those longer than 21 years.
    2. Building Requirements: The building must comprise at least two flats, and no more than 25% of the building should be used for non-residential purposes.

    Calculating the Number of Leaseholders Required

    To determine the exact number of leaseholders needed, you should consider the total number of flats in the building. For example, if there are 10 flats in the building, at least 5 leaseholders must participate in the collective enfranchisement process.

    Steps to Initiate Freehold Purchase

    1. Forming a Collective: Interested leaseholders should form a collective group. It is advisable to create a formal association to streamline the process.
    2. Valuation: Engage a professional surveyor to carry out a valuation of the freehold. This helps in understanding the cost implications and negotiating a fair price.
    3. Serving the Initial Notice: The collective group must serve a formal notice on the freeholder, expressing their intention to purchase the freehold. This notice must include the proposed purchase price.
    4. Negotiation and Agreement: Following the initial notice, the freeholder has the right to respond and negotiate the terms. Both parties will work towards reaching a mutually acceptable agreement.
    5. Legal Formalities: Once an agreement is reached, the legal process of transferring the freehold begins. This involves drafting and signing legal documents and completing the transfer of ownership.

    Benefits of Buying the Freehold

    1. Extended Leases: Leaseholders can extend their leases at no additional cost.
    2. Control Over Service Charges: As freeholders, leaseholders have greater control over service charges and management of the building.
    3. Increase in Property Value: Properties with a share of freehold tend to have higher market value.Freedom from Ground Rent: Leaseholders are no longer required to pay ground rent, which can be a significant financial relief.

    Challenges and Considerations

    While buying the freehold offers numerous benefits, it also comes with challenges:

    1. Cost: The process can be expensive, considering the cost of purchasing the freehold, legal fees, and valuation charges.
    2. Coordination: Coordinating among multiple leaseholders can be challenging and requires effective communication and cooperation.
    3. Legal Complexities: The legal process can be complex and may require professional guidance to navigate successfully.


    Criteria Description
    Minimum Leaseholders At least 50% of the leaseholders in the building
    Qualifying Criteria Leaseholders must have long leases (typically more than 21 years)
    Participation Threshold More than half of the flats must be leaseholder-occupied
    Process Formal application to the freeholder and potentially the First-tier Tribunal if there are disputes


    Purchasing the freehold can be a wise investment for leaseholders, providing increased control and potential financial benefits. By understanding the legal requirements and the number of leaseholders needed, you can make informed decisions and take the necessary steps towards achieving collective enfranchisement. Leasehold Valuations is here to guide you through every step of the process, from initial valuation to legal formalities, ensuring a smooth and successful journey. Our expert team is ready to assist you in making this important investment with confidence.

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