Leasehold Advice
Collective Enfranchisement: Buying the Freehold
Collective enfranchisement is the right for the leaseholders in a block to buy the freehold of their building together. This guide covers how it works, what it costs and what it means when you sell.
Overview
Collective enfranchisement is the statutory right for the leaseholders in a block of flats to buy the freehold of their building together. It is the ownership counterpart to Right to Manage: Right to Manage hands the leaseholders control of how the building is run, while collective enfranchisement hands them ownership of the freehold itself.
The leaseholders who want to take part club together, pay a price for the freehold and end up owning it collectively, usually through a company set up for the job. It costs more than Right to Manage and takes longer, but it is the more complete and permanent answer: the leaseholders become their own freeholder, can grant themselves long leases at a peppercorn ground rent and run the building for good. This guide explains how it works, whether your building qualifies, what it costs and how it affects a sale.
This guide describes the law in England and Wales. Collective enfranchisement is a feature of the leasehold system in England and Wales and does not apply in Scotland or Northern Ireland.
What It Is, and How It Differs from Right to Manage
Collective enfranchisement and Right to Manage are often spoken about together, and they do solve overlapping problems, but they are not the same thing. The difference is ownership.
The Right to Manage comparison
Right to Manage transfers the running of the building to the leaseholders. The freeholder still owns the freehold, still receives the ground rent and can still sell the freehold on. Collective enfranchisement transfers the freehold itself: the leaseholders buy it, so there is no longer an outside freeholder at all. Right to Manage has no purchase price, only the leaseholders' own costs. Collective enfranchisement means paying a premium for the freehold as well, so it is more expensive and more involved. The trade-off is that it is permanent and complete. For the management-only route, see our guide on Right to Manage explained.
What owning the freehold gives you
Once the leaseholders own the freehold, through their company, they are their own landlord. The company can grant the participating leaseholders new, much longer leases, often 999 years, at a peppercorn ground rent, which deals with lease length and ground rent in a single move. The leaseholders control the management directly and decide who the managing agent is or whether to self-manage. There is no third party taking a ground rent or a commission. The flats are then described as having a share of freehold, which is generally regarded as a stronger position than ordinary leasehold. For how the three tenures compare, see Leasehold vs Freehold explained.
It is a collective effort
The word collective is doing real work here. This is not something one leaseholder can do alone: it needs enough of the neighbours to agree, to commit money and to see the process through. That is the main practical hurdle, more so than the law itself.
Does Your Building Qualify
The qualifying conditions sit in the Leasehold Reform, Housing and Urban Development Act 1993, and they are about the building and the leaseholders rather than about the freeholder.
The building
The building has to be a self-contained building, or a self-contained part of a building. Any non-residential part, such as shops or offices, must not be more than 50 percent of the internal floor area. That limit was raised from 25 percent by the Leasehold and Freehold Reform Act 2024, which opened the route to more mixed-use buildings.
The leaseholders
At least two-thirds of the flats in the building have to be held by qualifying tenants, which broadly means leaseholders on long leases. As with Right to Manage, a long lease here means one originally granted for more than 21 years, judged on the original term rather than the years left, so a flat on a 99-year or 125-year lease counts even if it has run down. Then, to make the claim, the participating leaseholders have to hold at least half the flats in the building between them.
The exclusions
A few buildings are outside the scheme. The main one is a small converted building, with no more than four flats, where the freeholder or an adult family member lives in one of the flats and has done since before the conversion. If you are not sure whether your building qualifies, the Leasehold Advisory Service can confirm the basics, and a solicitor or valuer who specialises in enfranchisement can give you a firm answer before you spend money.
The Process and the Cost
Collective enfranchisement is a formal statutory process with a price attached, so it has more moving parts than Right to Manage.
The steps
First the leaseholders get organised: they check the building qualifies, sign up enough neighbours, agree how to share the cost and commission a valuation. They then set up the company that will own the freehold, the nominee purchaser. The formal claim begins when that company serves an Initial Notice on the freeholder, setting out the building, the participants and a proposed price. The freeholder replies with a Counter-Notice, which either accepts the right and proposes its own price, or disputes that the building qualifies. The price is then negotiated, and if it cannot be agreed it is settled by the First-tier Tribunal. Completion is the point at which the freehold transfers to the company.
What it costs
There are two parts. The premium is the price for the freehold itself, worked out by a valuer based on what the freeholder is giving up. That mainly comes down to three things: the ground rent income they lose; the value of the reversion, which is their right to get the building back at the end of the leases; and, on any participating lease that has dropped below 80 years, marriage value. Where not every flat takes part, the premium also picks up hope value on the non-participating flats: compensation for the prospect that their leaseholders might extend or buy in later. On top of the premium there are professional fees: your own valuer and solicitor, and at present the freeholder's reasonable costs of dealing with the claim as well. The premium varies hugely from building to building, so the only figure worth relying on is one from a valuer who has assessed your block. The cost is shared between the participating flats, which is what makes it manageable.
Marriage value and the reforms
Marriage value is the part of the premium most likely to change. It is an extra amount, payable where a participating lease is under 80 years, that reflects the uplift in value created when the leaseholders gain control, and the freeholder is currently entitled to half of it. The Leasehold and Freehold Reform Act 2024 is set to abolish marriage value, which would cut the cost of enfranchising blocks with shorter leases. Freeholders challenged that reform in the courts, and the High Court dismissed the challenge in 2025, but the valuation changes are still not in force and there is no confirmed date for them. The law could change, but anyone enfranchising now has to work with the costs as they stand today, marriage value included.
Collective Enfranchisement and Selling Your Flat
Whether your building has already enfranchised, is in the middle of a claim, or you are just weighing it up, here is how it sits with a sale.
Share of freehold is a selling point
A flat that comes with a share of freehold, a long lease and no ground rent is, on the whole, an easier sell than an ordinary leasehold flat with an outside freeholder, a shorter lease and a rising ground rent. Buyers tend to see it as a stronger position, and lenders are comfortable with it. If your building has enfranchised, that is a genuine point in the flat's favour, and it is worth making sure your estate agent and conveyancer can explain the setup clearly.
Selling during a claim
The situation that needs care is selling part way through a claim that has not completed. The ownership of the building is mid-transfer, which is not a problem in itself but is something a buyer's solicitor will want explained. The benefit of the claim can usually be passed to the buyer so they step into your place, but it needs handling properly. If your building is enfranchising when you come to sell, tell your conveyancer early.
If you cannot wait for completion
Collective enfranchisement is a slow, collective process. It is the right long-term answer for a building, but it is not a quick fix for one leaseholder who needs to sell now, especially if the neighbours are not all on board. If a short lease, a high ground rent or a difficult freeholder is the reason you want to sell and you do not want to wait out an enfranchisement, a sale to a cash buyer is the route least affected by those issues, since a cash buyer can take a view on the flat as it stands.
Relevant Legislation
Three pieces of law sit behind collective enfranchisement.
The Leasehold Reform, Housing and Urban Development Act 1993, usually called the 1993 Act, is the law that creates the right of collective enfranchisement. It sets out which buildings and leaseholders qualify, the notice procedure for making a claim and the basis on which the premium for the freehold is valued. It is the same Act that gives an individual leaseholder the right to a lease extension.
The Commonhold and Leasehold Reform Act 2002 amended the 1993 Act and made collective enfranchisement more accessible, removing older restrictions such as the requirement for leaseholders to have lived in their flats. It is also the Act behind Right to Manage, the management-only route covered in our separate guide.
The Leasehold and Freehold Reform Act 2024 is the reform Act, and its provisions are being brought into force in stages. The part most relevant to qualification, raising the non-residential limit from 25 percent to 50 percent, is already in force. The parts not yet in force include the abolition of marriage value and wider changes to how the premium for the freehold is valued. Freeholders challenged those valuation reforms in the courts and the High Court dismissed the challenge in 2025, but there is still no confirmed date for the valuation changes to take effect, so anyone enfranchising now works with the costs as they stand today.
Further Reading
Two related guides sit alongside this one: the management-only route, and how the three forms of flat ownership compare.
Frequently Asked Questions
Collective enfranchisement is the statutory right for the leaseholders in a block of flats to buy the freehold of their building together. It comes from the Leasehold Reform, Housing and Urban Development Act 1993. The leaseholders who take part club together, pay a premium for the freehold and end up owning it collectively, usually through a company they set up for the purpose. It is the ownership counterpart to Right to Manage: where Right to Manage transfers only the management of the building, collective enfranchisement transfers ownership of the freehold itself.
Right to Manage transfers the management of the building to the leaseholders but leaves the freeholder owning the freehold. Collective enfranchisement goes further: the leaseholders buy the freehold outright, so they own the building between them. Right to Manage costs the leaseholders their own setting-up and professional costs but no purchase price. Collective enfranchisement means paying a premium for the freehold on top of the professional costs, so it is more expensive and more involved, but it is also more complete and permanent. Some blocks use Right to Manage first and enfranchise later.
The main tests are about the building and the leaseholders. The building has to be a self-contained building or a self-contained part of one. At least two-thirds of the flats must be held by qualifying tenants, meaning leaseholders on long leases, broadly those originally granted for more than 21 years. Any non-residential part, such as shops on the ground floor, must not be more than 50 percent of the internal floor area, a limit raised from 25 percent by the Leasehold and Freehold Reform Act 2024. And to make the claim, the participating leaseholders have to hold at least half the flats in the building. A few buildings are excluded, such as small converted buildings with a resident landlord and no more than four flats.
There are two parts to the cost. The first is the premium, the price paid for the freehold itself, which a valuer works out based on what the freeholder is giving up: the ground rent income; the value of getting the building back at the end of the leases; and, on any participating lease that has dropped below 80 years, marriage value. The second is professional fees, your own valuer and solicitor, and at present the freeholder's reasonable costs of dealing with the claim as well. The premium varies enormously between buildings, so the only reliable figure is one from a valuer who has looked at your block. Splitting the cost between the participating flats is what makes it affordable.
No. The claim is made by the participating leaseholders, and they need to hold at least half the flats in the building between them. So not everyone has to join, but you do need enough of your neighbours on board to clear that halfway mark, and in practice the more who take part, the smaller each share of the cost. Leaseholders who do not take part keep their existing leases and simply have the participating group, through their company, as their new freeholder. They can usually buy in later, though often on less favourable terms than if they had joined at the start.
Longer than Right to Manage, because there is a price to agree as well as a process to follow. From getting organised to completion, a straightforward claim often takes around six to twelve months. If the premium cannot be agreed with the freeholder and the price has to be settled by the First-tier Tribunal, it takes longer. The early work of checking the building qualifies, getting a valuation and signing up enough neighbours is worth doing carefully, because it sets up everything that follows.
Marriage value is an extra amount in the premium that reflects the uplift in value created when the leaseholders gain control of the freehold. Under current law it applies where a participating lease has dropped below 80 years, and the freeholder is entitled to half of it, which can add a significant sum to the cost. The Leasehold and Freehold Reform Act 2024 is set to abolish marriage value, which would make enfranchising cheaper for blocks with shorter leases. Freeholders challenged that reform in the courts and the High Court dismissed the challenge in 2025, but the valuation changes are still not in force and there is no confirmed date for them. Anyone enfranchising now works with the costs as they stand today, marriage value included.
Your lease does not disappear. You still hold your flat on a lease, but now the freeholder is the company the participating leaseholders own between them, rather than an outside landlord. The usual next step is for the company to grant the participating leaseholders new, much longer leases, often 999 years, at a peppercorn ground rent. The flat is then described as having a share of freehold. You have effectively dealt with lease length and ground rent in one move, and the building is yours to manage.
Generally yes. A flat with a share of freehold, a long lease and no ground rent is an easier sell than a leasehold flat with an outside freeholder, a shorter lease and an escalating ground rent. Buyers and their lenders tend to view share of freehold favourably. The situation that needs care is selling part way through a claim that has not completed, because the ownership is mid-transfer. If your building is enfranchising when you come to sell, the benefit of the claim can often be passed to the buyer, but tell your conveyancer early so it is handled properly.
No. The freehold of a building is a single thing and cannot be split flat by flat. When a collective enfranchisement completes, the participating leaseholders, through their company, buy the entire freehold of the whole building, and the original freeholder is bought out completely. A leaseholder who does not take part still holds their existing lease, but their landlord is now the residents' company rather than the original freeholder. They do not get a share in that company, because they did not contribute to the purchase, though they can usually buy in later, often on less favourable terms. It is never a case of most of the building being enfranchised and one flat staying with the old freeholder: the whole freehold transfers, and the old freeholder is gone.
This is a common worry, and the reassuring part is real: marriage value is only assessed on the leases of the participating leaseholders, so a short lease on a flat whose owner does not take part does not bring marriage value into the premium. It is not free of cost, though. The participants buy the freeholder's interest in that flat as part of the whole freehold, and for a non-participating flat that interest is made up of the ground rent, the reversion (the right to the flat back at the end of the lease) and hope value (compensation for the prospect that the leaseholder might extend or buy in later). A short lease pushes up both the reversion and the hope value, so a non-participating short-lease flat can still add a meaningful amount to the premium. It is just not marriage value, and hope value is itself among the valuation reforms the Leasehold and Freehold Reform Act 2024 is set to remove, though that is not yet in force. The short-lease leaseholder keeps their lease and can extend later. The exact figures are technical, so a specialist enfranchisement valuer is the person to model them.