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Buying the freehold of a leasehold house

Freehold valuation (houses)

In this guide

The right of enfranchisement entitles you to buy the freehold of your house at a price based on one of two statutory valuation methods. However, certain variables within these formulas are open to interpretation, which often leads to disagreement between the leaseholder and freeholder.

A third-party valuation can help prevent or resolve these disagreements by making an objective, accurate estimate on the basis of relevant facts raised by the parties.

Using a valuer

You should hire a valuer who is a qualified surveyor (a member of the Royal Institution of Chartered Surveyors) and who specialises in freehold valuations.

The valuation process is very technical and needs in-depth market knowledge and access to information that is not freely available to the public.

What a professional valuer does

A valuer will:

  • tell you which of the 2 statutory valuation methods will be used
  • carry out the valuation
  • establish a valuation range – best and worst-case scenarios for how much you’ll have to pay
  • negotiate with the landlord on your behalf
  • provide expert evidence if no agreement is reached and the matter goes to tribunal
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It’s usually both impractical and risky for leaseholders to do their own valuation.

Information needed for a valuation

A valuer typically needs information about the lease and historic rateable values for the house. They might also ask about any improvements you've made to the property.

The lease

The valuer will need:

  • the date of the original lease
  • the amount of the original ground rent charged at the start of the lease
  • any premium (price) included in the lease

This should be on the first page of your lease.

Historic rateable values for the house

The valuer will look into the historic rateable values for:

  • the first day of the lease (if it had one), or on 23 March 1965 (whichever is later)
  • 31 March 1990

Statutory valuation methods

This section of the guide only gives an overview of the valuation process. It’s intended to help you understand the basic terminology and concepts before engaging a professional valuer. It is not a step-by-step guide.

Valuation is done in relation to either:

  • the value of the site (using the “original valuation” method)
  • the market value of the house, including a share of the marriage value (using the “special valuation” method)

Original valuation generally results in a lower price, but only applies if your lease:

  • passes a low-rent test
  • does not exceed certain value limits

Most freeholds are valued using using the special valuation method. You cannot choose which method is used. Your valuer will usually check the rules and tell you.

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The government is planning to reform the special valuation method including by abolishing marriage value and capping the treatment of ground rent in the valuation calculation. The original valuation method will not be changed. You may want to discuss with your solicitor or valuer if it’s better to wait until these reforms have been implemented.

Original valuation method - Show Contents

Only houses that pass a low-rent test and do not exceed certain value limits are eligible to use this valuation method.

This method for valuing the freehold is from the 1967 legislation.

It is based on the value of the land the house sits on rather than the house itself.

The purchase price of the freehold is the sum of:

  • the term
  • the first reversion
  • the second reversion

The term is compensation to the landlord for losing the right to collect ground rent over the life of the lease. It’s calculated using ground rent, remaining years on the rent and a technical multiplier called a years purchase (YP) factor.

The first reversion is compensation to the landlord for losing the right to collect ground rent for an additional 50 years because of a right to automatic lease extension.

The second reversion is a figure that represents the value today of the forfeited right to one day own the land when that lease would have expired.

Special valuation method - Show Contents

Later regulations supplementing the original 1967 Act changed the method of valuation.

The special method of valuation is based on compensating the landlord for the fact that the sale of the freehold means the house will not become their property at the end of the lease.

The purchase price of the freehold is the sum of:

  • the term
  • the reversion
  • half the marriage value

The term value is worked out in the same way as the term value in the original valuation method.

The reversion is worked out in a similar way to the original method, but without the assumption of an automatic 50-year extension of the lease (second reversion).

Marriage value relates to the increase in value of the freehold because as a freeholder its owner can extend leases at will. Half of the marriage value is added to the cost of buying the freehold.

When using the special method to calculate valuation, any improvements you have made to the property are ignored.

Last updated:
17 December 2025
Next review:
17 December 2027