If you own a leasehold house you normally have the right to buy the freehold after you have owned the lease for at least two years. You will have to pay for all of the legal fees involved.
Being a freeholder is more secure than being a leaseholder. Buying the freehold may make it easier to sell your home and will probably increase its value.
This is because:
• freeholders have more control over the management of their homes
• most freeholders don’t have to pay ground rent
• Freeholders can normally only be evicted if they don’t pay the mortgage or other secured loans.
You can probably buy freehold if:
• your lease covers the whole house – not just an individual flat or maisonette
• the lease was granted to the original leaseholder for at least 21 years
• You have owned the lease to your home for at least two years (it is no longer necessary to have lived in the property during that time).
However, you may be excluded from buying the freehold if:
• the freeholder is a charitable housing trust
• the public has the right of access to your property
• the freehold includes adjoining property (such as farm land)
• you have a business lease (although there are some exceptions)
• You bought your home through a shared ownership scheme and have not yet bought the remaining shares in your home.
How does the process work?
Making a freehold purchase (enfranchisement) can be a very complicated process. The basic steps are explained below. This is only an introduction to the procedure you will have to follow. You will probably need a solicitor to do the legal work.
The first step is to inform the freeholder that you want buy the freehold (the ‘initial notice’). The notice is a legal document and has to contain:
• your name and address
• details of the property
• the price you propose to pay (you can get a valuation to work this out)
• a deadline for the freeholder’s response (you must allow at least two months).
Once the initial notice has been given, you become responsible for the freeholder’s legal costs. You have to pay them even if the sale falls though.
If you find that you cannot afford to purchase your property it is well worth considering –if your lease has only a short term left –approaching the landlord for a lease extension.