Collective Enfranchisement Calculator — Leasehold Freehold Purchase Cost

Collective enfranchisement is the right for leaseholders in a qualifying residential building to collectively purchase the freehold of their building from the landlord. It was created by the Leasehold Reform, Housing and Urban Development Act 1993. Owning the freehold removes ground rent, gives control over the building, and allows lease extensions to 999 years at zero ground rent.

Requirements include: at least 2 flats in the building, qualifying tenants must hold at least 2/3 of flats with 21+ year leases, at least 50% of all qualifying flats must participate, the building must be mostly residential (commercial space under 25% of total floor area), and the building must not be a converted house or purpose-built block exempt under the Act.

At least 50% of all qualifying flats must participate. So for a 6-flat building, at least 3 leaseholders must join. However, participation by more leaseholders reduces the per-person cost. Non-participants benefit from the freehold purchase (the building is now under leaseholder control) but pay nothing toward the cost.

The price is negotiated with the freeholder, based on: (1) Capitalised value of ground rent income, (2) Reversion value (what freeholder gets when leases expire), (3) Marriage value (50% to freeholder for leases under 80 years), and (4) Hope value and development potential. If no agreement, the Leasehold Valuation Tribunal (First-tier Tribunal) determines the price.

Marriage value is the increase in property value created by the merger of leasehold and freehold interests. For leases under 80 years, 50% of the marriage value is payable to the freeholder. For leases over 80 years, no marriage value applies. The Leasehold and Freehold Reform Act 2024 proposes to abolish marriage value, significantly reducing costs.

Key steps: (1) Establish qualifying leaseholders and get 50% to participate, (2) Appoint a specialist solicitor and RICS surveyor, (3) Serve formal Initial Notice on freeholder, (4) Freeholder responds with Counter Notice, (5) Negotiate price (or go to Tribunal), (6) Exchange contracts and complete, (7) Register freehold ownership. Total process: typically 12-24 months.

After buying the freehold, leaseholders typically grant themselves 999-year lease extensions at zero ground rent. This is the main benefit — it makes the flats far more mortgage-able and valuable. The cost of lease extension after enfranchisement is usually very low (nominal fees) since the freehold company is owned by the leaseholders themselves.

If the freeholder cannot be found or refuses to cooperate, there are legal mechanisms to proceed including court orders and vesting orders. An absent freeholder can be a problem but is not an insurmountable obstacle. Missing freeholder procedures may add cost and time.

After enfranchisement, leaseholders typically form a Residents' Management Company (RMC) or Right to Manage company to hold the freehold and manage the building. Each participating flat gets a share in the company. The RMC/freehold company then grants new 999-year leases to all flats (participants and non-participants).

Costs include: RICS surveyor fees (£2,000-£5,000 per side), solicitor fees (£2,000-£5,000 per side), Tribunal fees if needed, notice registration fees, and the freehold premium itself. In many cases, participants must also pay the freeholder's 'reasonable' legal and valuation costs. Non-participants pay nothing but benefit from the freehold purchase.

Generally no. The collective enfranchisement covers the residential parts of the building. Commercial premises (ground floor shops etc.) can be included by agreement with the freeholder, but they are not required to be included. Including commercial premises can complicate the process significantly.

The 2024 Act includes major reforms: abolition of marriage value for lease extensions and enfranchisement, a cap on non-participating leaseholders' costs, changes to qualification rules, and potential for a simpler enfranchisement process. Many provisions are subject to commencement orders that were pending as of 2025 — check the current status of implementation.