Freehold purchase, or leasehold enfranchisement, is the legal right of qualifying leaseholders to collectively buy the freehold of their building from the landlord. Once purchased, leaseholders own the land outright and are no longer subject to ground rents or the landlord’s consent requirements. The right is governed by the Leasehold Reform, Housing and Urban Development Act 1993 in England and Wales.

The freehold premium is calculated using a statutory formula comprising three elements: (1) the present value of the ground rent income for the remaining lease term, (2) the landlord’s share of the ‘marriage value’ (the increase in value when freehold and leasehold are merged), and (3) any other compensation for loss. For leases with over 80 years remaining, marriage value is not payable. A qualified surveyor should always confirm the final figure.

To qualify for collective enfranchisement: at least two-thirds of flats must be held on long leases (originally over 21 years); at least half of all qualifying leaseholders must participate; no more than 25% of the building’s internal floor area can be in non-residential use; and the building must be a self-contained block or part of a building. There is no minimum lease length requirement to participate, but shorter leases affect the premium calculation.

Beyond the freehold premium you must budget for: your own solicitor’s fees (typically £2,000–£5,000+), your own surveyor/valuation fees (£1,500–£3,000+), the freeholder’s reasonable legal and surveyor costs (which you are legally required to pay), Stamp Duty Land Tax (SDLT) if the premium exceeds the threshold, Land Registry registration fees, and the ongoing cost of setting up a residents’ management company.

The capitalisation rate (cap rate) is used to convert the ground rent income stream into a present capital value. It reflects the yield an investor would expect for owning a ground rent income. Typical cap rates range from 5% to 7% depending on the lease length, security of the income, and market conditions. A lower cap rate produces a higher premium. Your surveyor will advise on the appropriate rate.

Yes — this is one of the most important factors in freehold purchase cost. When a lease drops below 80 years, marriage value becomes payable. Marriage value is the uplift in total property value created by combining the freehold and leasehold interests, and the landlord is entitled to 50% of it. This can significantly increase the premium. Most property advisers recommend purchasing the freehold (or extending the lease) well before the lease falls below 80 years.

No. This calculator provides an indicative estimate only. The actual freehold premium must be agreed between the parties (or determined by the First-tier Tribunal) and calculated by a qualified RICS surveyor. Factors such as lease terms, reversion value, review clauses, and comparable evidence all influence the outcome. Always obtain professional legal and surveying advice before serving a Section 13 Notice.

After serving a Section 13 Notice (Initial Notice) on the freeholder: the freeholder has 2 months to respond with a Counter Notice; if they accept, you negotiate the premium; if you cannot agree within 2 months of the Counter Notice, either party can apply to the First-tier Tribunal (Property Chamber) to determine the price. The whole process typically takes 12–24 months.