Contact Our Property Litigation Lawyers
If you have any queries concerning purchasing the freehold of your house, please contact Myerson's property litigation solicitors on:
The Leasehold Reform Act 1967 (the 1967 act) gives leasehold tenants of houses the right to buy the freehold.
The right to buy the freehold (and any intermediate leasehold interest, for example, the head lease) without the landlord's agreement is called 'enfranchisement'.
Some landlords will sell the freehold without you needing to make a formal claim.
The 1967 Act has been amended and extended over the years, making the rules for calculating the price complicated.
The latest amendments are set out in the Commonhold and Leasehold Reform Act 2002, which simplified the rules for qualifying for enfranchisement and gave leaseholders extra rights.
However, there are qualifying criteria that the house, the lease, and you will have to meet, which are set out further below by our Property Litigation team.
The house
The house must be a building which is reasonably considered a house, divided vertically from any adjoining house.
It does not matter if the building has been divided into flats as long as you have the lease of the whole house.
The lease
It must be a long lease, originally for a term of more than 21 years or with a right to renew.
Is it worth it purchasing the freehold to your home?
A homeowner may ask: is it worth purchasing the freehold to your home?
It can provide you with more control of the property, and you won't have to pay annual ground rent.
It will essentially provide you with freedom from the landlord as you will own the ground on which your property sits, and you will be able to make alternations without seeking the landlord's consent.
How much will it cost to buy the freehold?
There are different valuation methods to determine the premium.
However, three factors are used to calculate the premium: the current value of the property, the annual ground rent and the remaining term on the lease.
Valuing the freehold of a property is a complex process that will involve a surveyor.
Most houses qualifying under the legislation will be valued according to the Special Valuation Basis.
However, there is also the Original Valuation Basis.
The Original Valuation Basis – is used when a property qualifies under the original low rent test.
The Special Valuation Basis is used when a property does not qualify under the Original Valuation method.
In addition to the premium, you will need to factor in additional fees such as legal fees, property valuation fees, stamp duty and the freeholder's costs.
How can Myerson assist you?
If you decide to extend your lease and proceed down the statutory route, then the first step is to serve a notice on your landlord.
We can prepare and serve the notice on your behalf.
We can also advise you on the landlord's counternotice.
Thereafter, very strict timelines need to be adhered to to ensure you do not lose your right to purchase the freehold.
We will note these dates and will undertake the relevant steps to protect your position.
Once the parties have agreed on the terms for the freehold purchase (either under the voluntary or statutory route), our residential property team can document this on your behalf.