If you own a leasehold house, you have the legal right to purchase the freehold if you fulfil certain criteria.
With dramatically increasing ground rents and high service charges rife within the leasehold house market, critics argue that leasehold houses have no other purpose other than to maximise profits at the expense of the owners. The Government has announced plans to ban the sale of leasehold houses altogether. However, if you already own a leasehold house, you do not have to resign yourself to paying expensive ground rent and service charges forever.
At Housing & Property Law Partnership, we can help you take back the power and buy the freehold of your house. These matters require a skilled negotiator and our lawyers have many years of experience guiding clients through challenging discussions to ultimately achieve a positive deal.
We can also help you buy a share of the freehold to your flat – if you would like further information about this, please visit our Leasehold Enfranchisement/Freehold Purchase page.
For advice about purchasing the freehold of your house, get in touch with Ash Oberoi and our conveyancing solicitors in London by giving them a call or filling in the enquiry form to the right of the page.
Why choose HPLP Solicitors to purchase your freehold in London?
Housing & Property Law Partnership is a boutique law firm based in central London providing specialist residential property and commercial property advice. Our sole expertise is property law and, as such, we are highly knowledgeable and have considerable experience achieving positive outcomes for clients.
HPLP is an award-winning firm. We are members of the Law Society Conveyancing Quality Scheme Accreditation, which recognises us as a leading firm in residential conveyancing matters. In addition we are accredited by both the Association of Leasehold Enfranchisement Practitioners (ALEP) and Lexcel for our exceptional client care and legal practice management and expertise in this area of law.
Our first priority is always to act in your best interests. We will work swiftly to progress your matter and iron out any issues so your freehold purchase can be completed as soon as possible.
As well as expertly negotiating a good deal for you, we will also handle the administrative aspects of your purchase on your behalf, including registering your freehold ownership at the Land Registry and filing your Stamp Duty Tax Return.
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What is the difference between freehold and leasehold?
Unfortunately, many buyers do not fully understand what it means to buy a freehold or leasehold property as firms which do not specialise in conveyancing often fail to explain the difference.
Safe to say, we are not one of these firms. Given the high value of property purchases, we believe it is crucially important that you understand exactly what you are buying or the advantages of buying the freehold to your house when you already own the leasehold.
What is freehold?
Freehold is when you own a property and the land it stands on outright. You own the land in perpetuity, which means your ownership will never end (until you sell or die and it is passed to a new owner). You pay no ground rent to live in the property but you are completely responsible for its upkeep.
Traditionally, houses have always been sold as freehold but in recent years, vendors (developers in particular) have been selling houses as leasehold.
What is leasehold?
Leasehold means you own a long lease to occupy the property for a certain number of years. The land the property stands on belongs to the freeholder to whom you will likely pay ground rent and service charges. Depending on the terms of your lease, these charges could increase over the years.
Leases tend to run between 99 and 999 years. You should never buy a property where the lease is approaching 80 years or less because it will be increasingly expensive to extend the term and you could find it difficult to remortgage or resell. You will be responsible for maintaining the property itself but the freeholder will be responsible for maintaining common areas, such as hallways in flat buildings. Traditionally, flats have always been leasehold.
Should you buy the freehold to your house?
If you are in the financial position (or can obtain finance) to buy the freehold, it is nearly always a good idea. The following are a few of the reasons you should consider buying your freehold:
- You will be free from ground rent and service charges
- You will be free from other charges and restrictions, such as charges to change your mortgage or requirements for permission to keep pets or make home improvements
- You will own the house in its entirety (including the land it stands on)
- Your ownership will never end, unless you choose to sell or you pass away. This also means you will never have to spend more to extend your lease
- Your house is likely go up in value
The only potential drawback is that it obviously costs money to buy your freehold. You should carefully consider whether the value your property will gain and other non-financial benefits outweigh the costs.
Bearing this is mind, we can provide further advice about whether buying your freehold is right for you, taking into account your individual circumstances.
How do you purchase the freehold of your house?
There are 2 primary methods you can use to purchase the freehold of your house – the formal method or informal method.
The formal method is the statutory process under the Leasehold Reform Act 1967 which gives certain leaseholders a legal right to buy the freehold to their house.
You must be a “qualifying tenant” to get the right to buy the freehold of your house. The criteria you must fulfil are:
- You have either:
- A long lease of over 21 years from the date of grant
- A shorter lease with a right of perpetual renewal
- A shared ownership lease where your share is 100% (apart from in limited circumstances)
- You have owned the lease for at least 2 years
You must get the freehold interest valued as if it were being sold on the open market. You should then serve notice on the freeholder to start the formal enfranchisement process (there is no requirement to state your proposed purchase price at this stage).
The freeholder has 2 months from the date of service to respond to your notice whereby they will either accept your claim or deny it with their reasons. If they accept your claim, you will enter into negotiations on the purchase price.
If you cannot come to an agreement, you can apply to the First-Tier Tribunal (Property Chamber) where an independent judge will make a final decision on the price. After a price is agreed, the sale will take about 4 weeks.
If the freeholder denies your claim, you will need to make an application to the County Court.
You can enter into informal negotiations to purchase the freehold of your house at any time. This process can be much faster than taking the formal route; however, there is no obligation on the freeholder to come to an agreement with you and you have no right of redress at the First-Tier Tribunal (Property Chamber).