Buying a share of the freehold for your flat
Freehold valuation (flats)
By law, the agreed price must reflect the open market value of the freehold (plus marriage value and compensation) calculated using strict statutory formulas.
Despite this, leaseholders and the freeholder will often disagree on the final value. A professional independent valuer can help both parties come to an agreement by providing an impartial valuation of the freehold’s worth using the statutory formulas.
While a valuation is highly recommended, it is critical to ensure:
- it complies with the statutory formula
- the offer is not unrealistically low - this could result in the initial notice being ruled invalid
- the offer is not too high
The valuation gives a reasonable estimate, but the final price is always open to negotiation between leaseholders and the freeholder.
Using a valuer
You should hire a professional freehold valuer to do the valuation.
The process is very technical and needs in-depth market knowledge and access to information that is not freely available to the public. It’s usually impractical and risky for leaseholders to do their own valuation.
What a professional valuer does
A valuer will:
- calculate the statutory premium using the necessary formulas
- provide a best and worst-case valuation range to help you set a genuine offer price in the initial notice
- breakdown how much participating leaseholders will have to pay
- respond to the landlord’s counter-notice
- provide expert evidence if no agreement is reached and the matter goes to tribunal
- help negotiate and settle the final price
- advise on the structural condition of the property and how much repairs and ongoing maintenance and service charges might be
- advise on how to manage the freehold after purchase
Valuation calculation
This section of the guide only gives a high-level overview of the valuation process. It will help you understand the basic concepts before engaging a professional valuer and is not a step-by-step guide.
The valuation will be an estimate, which the valuer will use as the basis for a range (“best and worst” figures) within which the final price is likely to fall.
The valuation for the freehold is based on:
- the freeholder’s investment interest
- the marriage value – this only applies to leases that have 80 years or less left
Investment interest
The freeholder’s investment interest is the present value of the income and future rights the freeholder would enjoy if they kept the freehold.
This includes their current right to:
- charge ground rents (if applicable)
- own the flats outright when the leases end
Leaseholders’ improvements to the property are ignored in the valuation. This ensures leaseholders are not charged for value they have created themselves.
Hope value
The landlord may seek to increase the valuation by a third component, known as “hope value” – the value of future lease extensions to non-participating leaseholders. This is not a legal component, and the courts have ruled it is an element already accounted for in the investment interest.
Marriage value
Marriage value only applies if leases have 80 years or less left.
It’s called marriage value because the leaseholders’ and the freeholder’s separate interests are combined (“married”) after collective enfranchisement. This combination increases the property's value because:
- the freeholder can extend the leases as they want
- the leaseholder’s benefit, as longer leases add value – especially when the lease has less than 80 years left
Half of this extra value must be given to the freeholder.
The calculation of marriage value only includes those flats that are participating in collective enfranchisement.
As part of the leasehold reforms, the government is planning to abolish marriage value. You may want to discuss with your valuer if it’s better to wait until this reform has been implemented.
- Last updated:
- 20 December 2025
- Next review:
- 20 December 2027