Freehold Conveyancing

Are you looking to buy the freehold on your residential property? Under the Leasehold Reform Act 1967, most leasehold house owners in England and Wales have the statutory right to buy the freehold title to their lease, a process often referred to as ‘leasehold enfranchisement.’ However, to do so, there are various legal technicalities to consider.

It is crucial to know that purchasing a freehold title to a property differs from buying a house. The leaseholder must meet specific criteria for statutory leasehold enfranchisement rights to come into effect, and the process can be complex. Therefore, it is essential you seek specialist legal advice.

We also provide expert assistance to individuals who wish to sell their freehold title to their leaseholder. If you are a freeholder of a residential property, it is vital to understand enfranchisement if you’re considering selling your freehold or if your leaseholder has requested to purchase it.

At Mounteney Solicitors, our team of Freehold Purchase Solicitors, led by Head of Residential Property Amanda Neill, have the skills and expertise to guide you through the freehold acquisition process. While freehold titles are generally more desirable than leasehold titles due to their simplicity and potential to render the property more valuable, we understand that complicated issues can arise.

Please note that this product refers to houses only. The purchase of freeholds for flats raises much more complicated issues beyond the scope of this product. However, if you wish to enquire about a freehold flat purchase quote, we would be more than happy to discuss your options for the conveyancing work after you have independently negotiated and agreed with your freehold owner.

If you’re interested in buying the freehold on your property, you must first approach the current freeholder to ask if they are prepared to sell and to discuss the cost. If the freeholder refuses a voluntary sale of the freehold, you may still be able to purchase the freehold under enfranchisement.

The right to enfranchisement depends on the following conditions:

• The property must be a house (some commercial properties, like shops with a flat above, may also qualify).
• The lease must be for a term of more than 21 years.
• The leaseholder must have held the lease for at least two years (in cases of death, personal representatives can apply within two years of probate).

Should you meet these conditions, our legal representatives have the knowledge and capability to use the relevant legislation to serve a legal notice on the freeholder to acquire the freehold.

The process of purchasing the freehold does not end once the terms of the sale are agreed. You must then legally record the land transfer with HM Land Registry and obtain a new title. There may also be other covenants to consider regarding the building, extensions and improvements. It is also crucial to understand that if you’re looking to buy the freehold on your property, you will have to pay your own conveyancing fees, and depending on the terms of the leasehold, the freeholder may require you to cover their legal costs, too.

It is essential to seek specialist legal advice if you’re considering purchasing the freehold on your property to ensure you complete all the required steps and are aware of any restrictions and whether they can be altered or lifted.

Enfranchisement is the leaseholder’s legal right to purchase the freehold of their house under the Leasehold Reform Act 1967 and amended by the Commonhold and Leasehold Reform Act 2002. The leaseholder may take full ownership of the property under certain conditions, ending the lease agreement. For the leaseholder to qualify, they must meet the criteria set out above.

To purchase the freehold to a property, the typical enfranchisement process is detailed and must follow specific steps to ensure compliance with legal requirements.

The steps involved in the enfranchisement process include:

1. Serving the tenant’s notice: The leaseholder serves a tenant notice on the freeholder, which does not need to include a proposed price but must follow the prescribed format.
2. Responding to the notice: The freeholder must respond within two months with a notice of reply, agreeing to the terms set by the leaseholder or disputing it with their reasons.
3. Valuation and price agreement: The price is negotiated using a statutory formula. Disputes over the price can be referred to the First-tier Tribunal.
4. Completion of sale: Once the price is agreed upon, the sale must be completed within four weeks. The freeholder should ensure all financial and legal documents are prepared for a smooth transfer.

If you are a freeholder and have been served a tenant’s notice, you can negotiate the valuation and proceed with the sale, collecting any necessary deposits.

However, if you wish to, you can also dispute the claim, serving a counter-notice within two months with reasons for the dispute.

Given the complexity of the process, we strongly recommend seeking professional legal and valuation advice to ensure compliance and a fair sale process; this ensures both parties understand their rights and responsibilities and that the transaction is handled efficiently.

Buying the freehold of your property can be a significant investment offering numerous advantages, including:

• Ownership of the whole property: Owning the freehold means that the building and the land it sits on belong entirely to you, offering greater security and control over your property.
• Elimination of ground rent: One of the primary reasons for buying the freehold is to avoid paying ground rent. Whilst ground rent for older properties can be relatively low, it can be much higher for newer properties, impacting affordability and resale value.
• Freedom from leasehold restrictions: If your home is under leasehold, you will likely face restrictions on modifying your property. Although you must still adhere to planning permissions and building regulations on freehold property, you will have more freedom to make alterations.
• Long-term financial benefits: Although buying a freehold won’t necessarily increase a property’s market value, it can make it more attractive to potential buyers who don’t wish to face the ongoing costs or restrictions of a leasehold.
• Improved marketability: If you have a short lease term on your mortgage, it can be challenging if you’re attempting to sell or remortgage it. Owning the freehold eliminates these issues altogether.
• Protection against escalating costs: In the case of new-builds especially, leasehold properties are often subject to dramatically increasing ground rents over time, sometimes making properties unaffordable. Freehold ownership protects you from these escalating costs.
• Avoiding lease expiration issues: Once the fixed term on a leasehold has expired, the property reverts to the landlord, significantly diminishing the value of your property as the lease term shortens. With freehold ownership, you will be the property’s landlord and can enjoy full ownership.

As a homeowner, the long-term benefits make the purchase a wise choice. Buying the freehold on your property will allow you greater control, financial predictability and peace of mind, making the initial investment well worth the costs.

The process of buying a freehold can be complex and often time-consuming. Our team is well-equipped to get things done for you to ensure a successful transaction. Following the client retention process, we will begin working on your case promptly; this involves several hours of coordinated work with third parties, which can take several weeks.

Once we have completed the necessary work, we will submit your application to the Land Registry for registration. The processing time at the Land Registry varies widely, depending on their workload. Some applications are processed quickly, while others may take several months. However, the Land Registry processes applications in the order they are received, so delays should not affect the priority of your application relative to other matters on the title.

In some cases, an application can be made to a Land Tribunal to decide the terms of a sale. The price for the freehold is usually low compared to an actual building sale; this often allows leaseholders to fund the price in cash without needing a mortgage.

Our basic service does not include title certification, such as reporting on covenants, easements or ground rents. If a detailed report is needed, it would convert our work into a standard conveyancing transaction, priced accordingly. The basic service covers the merger or extinguishment of the leasehold title in the registration of the freehold transfer upon request. If the leasehold title is registered and uncharged, this can be done simply by request during registration. However, if the leasehold title is charged or unregistered, additional complexities may arise, affecting the cost.

Mounteney Solicitors, regulated by the SRA, charges VAT, which some clients may be able to reclaim. Our fee is £525 + VAT = £630, plus the Land Registry registration fee, usually £40.

Additional costs may also apply:

• Negotiation of price (we do not advise): £125 + VAT = £150
• Payment of arrears: £75 + VAT = £90
• Unrepresented seller: £75 + VAT = £90
• Part title supplement: £125 + VAT = £150
• Merger of the leasehold title: no further charge for uncharged leasehold. For charged leasehold:
  • Discharge: £125 + VAT = £150
  • Transferred to freehold: £225 + VAT = £270
  • Lending security work (i.e. raising a mortgage): £425 + VAT = £510

There is more about our fees on our website here.

If you have any questions, require any further information, or would like to engage us (that will be on the T’s & C’s that are linked, “Our Terms”, in the footer, below) please don’t hesitate to Contact Us.

If you’re considering buying or selling the freehold on your property and need expert legal assistance, contact our Freehold Purchase Solicitors today. Our dedicated team is available to offer comprehensive support throughout the process, ensuring a straightforward and successful purchase.

Our Solicitors in Stockport have offices in Bramhall, Cheadle and Heald Green. We serve clients throughout the Stockport and Manchester area, including Altrincham, Hazel Grove, Poynton, Wilmslow and Sale, so we are easily accessible and ready to assist you with all your legal needs.

Get in touch today for personalised legal advice and to learn more about how we can help. We eagerly await your call.