There are two ways to buy your freehold. You can take a formal route, which gives you more protection, or an informal route which could save you time and money.
It is worth starting with the informal route and switching to the formal one if you need to.
Informal route
Under this route, you ask the freeholder whether they are interested in selling the freehold. There is no obligation on the freeholder to respond or to agree to sell.
If the freeholder agrees then you can negotiate.
But if you cannot agree on price and terms, and you meet the criteria, you can still use the formal route to try to buy the freehold.
Formal route
If you own the leasehold of a house you can buy the freehold by law if you and the building meet certain conditions:
Under this route you and the freeholder need to follow a procedure and strict timescales set out in the law.
In short, you serve a formal notice on your landlord outlining your claim and your terms, and they have 2 months to reply. These are the possible outcomes:
Get help
Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.
Template letter for the informal route
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There are several ways to find out who your freeholder is:
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A chartered surveyor should be able to calculate the value of the freehold for you.
The calculation will depend on a number of factors, including:
These rateable values will tell your chartered surveyor which valuation method to use:
You or the landlord cannot choose which valuation method to use. It depends on the qualification criteria.
Buying the freehold can be a difficult process. We recommend that you get professional help from a solicitor and surveyor with experience in this area.
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Yes, you can. Under the Leasehold Reform Act 1967 (‘the 1967 Act’) the owner of a leasehold house may be entitled to a statutory lease extension of 50 years. In this case, there is no premium (price) to pay for a lease extension of a house. But when your new lease begins, the old ground rent may be replaced with a more expensive ‘modern ground rent’, which is based on the letting value of the house and other measures. You will also have to pay the landlord’s legal and valuation costs.
However, if you choose to go for an informal (non-statutory or voluntary) arrangement with your landlord to extend the lease, you will only have to pay a peppercorn (zero) ground rent on the new term and the landlord cannot increase the ground rent that is charged on the balance of the term of the original lease, it must not exceed the original ground rent and a lower ground rent may be agreed for the balance of the original term. In any case, you should closely check the terms of any new lease before agreeing to them.
Whether you take the formal statutory or informal non-statutory route, it is important to seek professional advice before seeking an extension.
Should I buy or extend?
If you have the statutory right to extend the lease, then you also have the option of buying the freehold. As you can only extend your lease by 50 years, you may decide that buying the freehold makes better sense in the long term and although is likely to be more expensive, you will no longer have to pay ground rent.
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The length of the process varies depending on whether you follow the formal or informal route whilst negotiating with your freeholder.
If you follow the formal route, the process can take some time and a period in excess of 12 months is not unusual.
If you follow the informal route, it depends entirely on the speed of negotiations as there are no hard and fast rules in this case. The informal route can potentially save time and it is recommended you try the informal route first.
Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.
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You need to have been the registered owner of the house for two years. In most circumstances it does not matter whether you live there.
Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.
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The main cost that you have to pay is the price (premium) for purchasing the freehold.
There are other costs involved in the process but that depends on whether you are negotiating informally or formally with the freeholder.
If you are negotiating formally and buying the freehold under the law, you are liable to pay the freeholders reasonable legal and valuation costs. If you cannot agree on what is reasonable, either party may apply to the First-tier Tribunal (Property Chamber) for an assessment to be made.
If you are negotiating informally to buy the freehold you should ideally have a written agreement as to what costs you will pay. In this case, there are no hard and fast rules and it depends on what you can negotiate with the freeholder. The legal costs can vary depending on the complexity of the matter.
Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.
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Still not found the answer?
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The Leasehold Reform Act 1967 enables you, if you qualify, to apply to the County Court to acquire the freehold. However, you will be required to demonstrate that you have made all reasonable attempts to locate the freeholder. In some cases an enquiry agent may be useful to carry out a search and to produce a report which can be used as evidence that the freeholder is indeed missing. It is wise to seek advice from a solicitor both on investigating the freeholders absence and the application to the County Court.
Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.
More information you might find useful:
Still not found the answer?
Contact LEASE to have your enquiry dealt with by one of our experienced advisers
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