Freehold Purchase Calculator UK

The premium comprises three main elements: the capitalised value of the ground rent stream the freeholder loses, the reversion value (discounted present value of the freehold at lease end), and—if your lease has fewer than 80 years remaining—50% of the marriage value. Marriage value represents the uplift in property value when the leasehold and freehold interests merge. For collective enfranchisement, hope value for non-participating flats may also apply.

Buying the freehold gives you outright ownership of the land and building (for houses) or a share of freehold (for flats), eliminating ground rent entirely and giving you control over maintenance and insurance. A lease extension simply adds years to your existing lease (typically 90 years on top of the unexpired term for flats) and reduces ground rent to a peppercorn (zero). For flats, collective enfranchisement often works out cheaper per flat than individual lease extensions and provides long-term control.

When a lease drops below 80 years, the law requires you to pay the freeholder 50% of the "marriage value"—the increase in property value that occurs when you merge the leasehold and freehold interests. This can add thousands to the premium. Many advisers recommend extending or buying the freehold before your lease falls below this threshold.

The capitalisation rate converts the annual ground rent into a capital sum—the higher the rate, the lower the capitalised value. Typical rates range from 6% to 8%. The deferment rate discounts the future freehold reversion to present value; the Sportelli case established 5% for houses and 4.75% for Prime Central London flats. Lower deferment rates result in higher reversion values and thus higher premiums.

Ground rent clauses that double every 10, 15, or 25 years dramatically increase the capitalised ground rent element of the premium because future rents become very large. Such leases can also be problematic for mortgages. The Leasehold and Freehold Reform Act 2024 will cap ground rent used in calculations once fully implemented, but currently these escalating rents can significantly raise your costs.

Under current law (December 2024), yes—you typically pay reasonable legal and valuation fees incurred by the landlord. However, the Leasehold and Freehold Reform Act 2024 includes provisions to abolish this requirement once implemented. Check the current status of the reforms, as they may not yet be in force.

Hope value compensates the freeholder for the potential future profit from non-participating flats that don't join the collective purchase. Since the new freehold company will eventually collect ground rent and reversion from these flats, the outgoing freeholder receives a share of that expected gain. It typically adds 5–15% to the premium attributable to non-participating units.

Negotiations are common, and if you cannot agree on the premium, either party can apply to the First-tier Tribunal (Property Chamber) for a binding determination. The Tribunal will assess evidence from both sides' valuers and set a fair premium. Having a robust valuation from an experienced RICS surveyor strengthens your position.

Generally, no. Individual flat leaseholders cannot enfranchise alone under the 1993 Act—you need collective action with other qualifying tenants, or the freeholder must voluntarily agree to sell. However, if you and fellow leaseholders already own the freehold collectively (share of freehold), you effectively control the building without needing further enfranchisement.

For leasehold houses, the process typically takes 4–6 months from serving notice. Collective enfranchisement for flats is more complex—expect 6–12 months or longer, especially if negotiations are protracted or a Tribunal application becomes necessary. Having an organised group and responsive professionals speeds things up considerably.