If you own a leasehold flat, together with the other homeowners in the building, you might be able to buy it.
The difference between a freehold and a leasehold property
When you buy a freehold home, you purchase the property, and the land it is built on outright. However, with a leasehold property, you have an agreement from the freeholder to use the home for a set number of years. The freeholder can be an individual or an organisation.
The benefits of owning a freehold
- You don’t have to pay annual ground rent to a landlord
- You don’t have to worry about a leasehold agreement running out
- With a leasehold you may have to seek permission or rely on someone else to make improvements
- With a leasehold you may be subject to high service charges or maintenance costs
- You have more control. For example, you don’t have to seek permission to rent your flat, carry out alterations, or even get a pet.
Buying a freehold
Leaseholders are legally entitled to buy their freehold. You can do this even if the freehold is not for sale. But you should offer a fair market price.
If you live in a block of flats, you can’t do this on your own. However, together with the other leaseholders, you can buy the freehold between you.
To buy a freehold, strict criteria apply. So it’s best to ask a professional for help with this process. Furthermore, when purchasing a freehold, the leaseholders must set up a company, and set out the agreed terms, rights and responsibilities between them.
Once the leaseholders have informed the landlord that they want to buy the freehold, and how much they want to pay, the freeholder has two months to decide whether or not to agree. There is also a further two months allowed to negotiate and agree to a deal. If an agreement cannot be reached, it is possible to have a Judge decide.
When to buy your freehold
Leaseholders can work together to buy their freehold at any time. Common trigger points include:
- When the freeholder is selling and you are worried about who the new owner will be. In such circumstances, leaseholders must be given first refusal
- When the freeholder puts the annual ground rent up or charges over the odds for repairs and insurance
- If your lease is due to expire. Once a lease has less than 80 years remaining it is more expensive to extend. As such, this can deter potential buyers as they struggle to get a mortgage. Even if you are not planning on selling, it’s vital that you address this situation – either by extending the lease or buying the freehold.
Contact us
If you would like to speak to one of our expert property lawyers, ring us on 0333 3055 189 or email us at info@lpropertylawyers.co.uk
