Owning the freehold of your property is often seen as the ultimate goal for leaseholders. It means greater control over how your building is managed, what you spend, and how decisions are made. But it’s worth understanding what that really means in practice, because in most cases, you don’t own the building outright.
When leaseholders buy the freehold together, they usually set up a Residents’ Management Company (RMC) or a similar legal structure. That company becomes the freeholder, and each participating leaseholder owns a share in it. So, while you and your neighbours collectively own the building and the land it sits on, you still hold your individual flat on a lease and must continue to follow its terms.
This shared ownership model gives residents the power to make decisions about maintenance, insurance, and service charges, but it also comes with shared responsibility. Done well, it creates a fair and transparent approach to managing your building. Done badly, it can become complicated, so it’s important to go in with your eyes open.
Is it the right move for you?
If you live in a block of flats, at least half of the leaseholders usually need to agree to take part before you can move forward. Once the freehold is purchased, the new Residents’ Management Company takes over the duties of the previous freeholder, such as setting budgets, arranging repairs, and appointing managing agents.
For many leaseholders, buying the freehold makes sense when they’re unhappy with how their building is currently managed, when service charges feel excessive, or when their leases are starting to shorten. It’s also a way to safeguard the value of your home, especially if your lease has less than 90 years left to run.
Understanding the costs
The cost of buying a freehold varies. It depends on the property’s value, the remaining lease length, ground rent terms, and whether any “marriage value” applies, that’s the added value that arises when leaseholders gain control of the freehold.
As a rough guide, you might expect costs to start around £8,000–£10,000, but this can rise significantly depending on the size of the property and its location. You’ll also need to budget for professional fees, including a RICS-qualified surveyor to value the freehold, solicitors for both sides, and the setup of the management company.
While it’s not a small expense, it can be a worthwhile long-term investment. Extending your lease and having a say in how your building is managed often leads to greater stability and a stronger property value.
How the process works
The process begins with agreement between leaseholders. Once you have enough support, a specialist solicitor will guide you through either a formal (statutory) or informal (voluntary) route to buy the freehold. The formal process involves serving notice to the existing freeholder and negotiating the purchase price.
After completion, ownership of the freehold transfers to the Residents’ Management Company. Each participating leaseholder becomes a shareholder or member, and the leases are usually extended to 999 years with no ground rent.
At this point, the group takes over all management duties. Many RMCs choose to appoint a professional managing agent to handle compliance, maintenance, and financial management, ensuring the building remains well looked after and legally compliant.
The pros and cons
Owning your share of the freehold brings real benefits: control, transparency, and long-term value. You decide how your money is spent, who looks after your building, and how things are maintained. It also removes the uncertainty of dealing with a distant or unresponsive landlord.
However, it’s not without its challenges. Disagreements between leaseholders can arise, decisions must be made collectively, and the company needs to stay compliant with its own legal duties. You’re still bound by the terms of your lease, and the responsibility for maintaining and insuring the building falls to the group.
That’s why clear communication, good governance, and professional support make all the difference.
How the Reform Landscape affects you
A significant change now to be aware of is the Leasehold and Freehold Reform Act 2024. The Act received Royal Assent and indicated several important changes that will influence freehold purchase strategies.
Some of the key reforms include:
- The requirement that a leaseholder must have owned the property for two years before being able to extend the lease or buy the freehold has been removed (with effect January 2025 for certain cases).
- The standard lease extension term is increasing (to up to 990 years for houses and flats) and ground rent can be reduced to a peppercorn (zero financial value) on lease extension.
- Greater transparency in service charges, buildings insurance commissions and management fee structures, meaning you as a leaseholder will have better access to information and improved rights to challenge unfair practices.
- The “marriage value” component (previously an additional cost in freehold purchase valuations) will no longer apply when certain leaseholders purchase the freehold.
- The Act also relaxes criteria for collective enfranchisement (freehold purchase) and right to manage claims, making it somewhat easier for leaseholders to take control over their building.
If you’re considering buying the freehold, you may find the process becoming simpler, cheaper and more leaseholder-friendly in future. But be aware that many provisions of the Act are not yet fully in force. Implementation, secondary legislation and regulations are still catching up, so you should still seek current professional advice rather than assume all reforms apply today.
A JMJ perspective
At JMJ Asset Management, we believe that owning your share of the freehold is about empowerment and protection. It gives you a voice and ensures your building is cared for properly, but it works best when it’s managed with structure and accountability.
We’ve seen how successful Residents’ Management Companies create strong, well-maintained communities where residents feel secure and informed. We’ve also seen how things can unravel without the right guidance. That’s where we can help, offering clear, calm, and confident support to make sure your asset stays protected.
If you’re considering buying your freehold or already managing one, we can help you navigate the process, set up robust management practices, and keep your building compliant and cared for.
