The premium provided by our freehold calculator should be used as a guide only. You shouldn’t use any figures provided by our calculator as evidence in court, nor should you assume the figures are 100% accurate without having your flat or building valued by a chartered surveyor. However, our calculator will give you a reliable approximate range estimate.
You need the following figures to use our freehold calculator:
The current value of the freehold
The annual ground rent
The number of years remaining on the lease
Other variables that are required to determine the cost of collective enfranchisement include the expected increase in your property’s value as well as forecasted inflation and interest rates. Our calculator uses reasonable default values to give you an estimate, but only a chartered surveyor can give you an accurate valuation.
If you have any questions regarding collective enfranchisement or want to discuss your options with a qualified professional, call the experts at Harding Chartered Surveyors on 020 3598 6730. We’re more than happy to value your freehold at a time that’s convenient for you.
Freehold Purchase Calculator
Freehold Calculator: Cost Factors
In addition to the size and location of your block or building, the price of purchasing your freehold largely depends on how many freeholders are involved, the number of flats in the building, the average length of time remaining on each lease and the potential added value of your building following the purchase. You also need to consider fees such as:
- Marriage Value
The freeholder is legally entitled to 50% of the increase in value of your leasehold. Your flat’s value will inevitably rise after you purchase the freehold and extend the lease.
If any of your landlord’s interests are adversely affected as a result of collective enfranchisement – such as if any of their remaining freeholds lose value – you may have to pay compensation.
The Leasehold Reform, Housing and Urban Development Act 1993
By law, leaseholders have a legal right to band together to purchase a share of their freehold, essentially giving the current freeholder the boot. This process is called collective enfranchisement, which can be beneficial for more reasons than one.
By purchasing a share of your freehold, you can increase your flat’s value as well as assume responsibility for maintenance, which could reduce your service charges by hundreds of pounds every year. Moreover, you can usually extend your lease for up to 999 years free of charge as well as eliminate ground rent.
Generally speaking, the fewer years you have remaining on your lease, the more it will cost to purchase your freehold. There are also alternatives to collective enfranchisement that might be more affordable. You can gauge the cost-benefit of purchasing your freehold by utilising the freehold purchase calculator on this page.
Below, we’ll discuss some of the pros and cons of collective enfranchisement to help you decide whether it’s the right path for your situation. We’ll also detail some crucial information and fees with which you need to become familiar.
How to Buy Your Freehold
If you decide to purchase your freehold through the process of collective enfranchisement, you can either reach an informal agreement with your landlord or follow the legal guidelines. If you choose formal negotiations, you’ll need to first serve your freeholder with an official notice that contains details of your offer. Your landlord/freeholder has a time limit to respond.
Don’t be surprised if your landlord disputes your offer. If they do, you’ll have a time limit to respond to the counter-offer. If you can’t reach an agreement, you can take your case to a Leasehold Valuation Tribunal, but be aware the costs can run into the thousands, and you may be liable to cover some or all of your landlord’s fees.
We highly recommend having your freehold valued by a chartered surveyor prior to making an official offer. By doing so, you’ll also have a valuation that can be used as evidence if you need to make an appeal. First, you can get an estimate of the costs involved with buying your freehold by using our freehold purchase calculator. If you need any advice from a qualified expert, don’t hesitate to give us a call.
Should I Buy a Share of the Freehold?
Depending on your requirements, there are two alternatives to collective enfranchisement: you can either extend your lease or apply for the ‘right to manage’ your building. You’ll have to club together with other leaseholders to take over your building’s management, and the same applies to collective enfranchisement.
If you simply want to add years to your lease, extending your lease might be a more affordable option than buying your freehold. If you’re considering collective enfranchisement so that you can take over maintenance, you’re likely better off applying for the ‘right to manage,’ which you can often do for free besides the legal fees.
Both lease extensions and collective enfranchisements become more expensive as the number of years remaining on your lease reduces. If you’re approaching the 80-year mark, you should seriously consider taking action sooner rather than later. If you already have less than 80 years remaining on your lease, you can buy the freehold (provided your fellow freeholders are willing to take part) and usually extend your lease for free.
Some studies suggest that those who own a freehold can generally sell their flat for more than those who only have a lease, assuming the two flats are almost identical. According to the estate agency Kinleigh Folkard & Hayward, most surveyors add one percent to a flat’s value for the benefit of the freehold.
In short, the benefits of collective enfranchisement include:
You can usually extend your lease by up to 999 years for free. Legal fees may apply
Normally, you won’t need to continue paying ground rent
You can increase the value of your flat while making it more appealing to potential buyers
You can minimise service charges by choosing your own providers instead of having to make do with those provided for you
You can take over your building’s maintenance – no more waiting around for slow landlords