If you own a leasehold property in Tameside, Ashton-under-Lyne, or Greater Manchester, you may have heard the term leasehold enfranchisement. But what does it mean, and why is it important?
In simple terms, leasehold enfranchisement is the process of a leaseholder purchasing the freehold from the freeholder. This gives you full ownership of both the property and the land it sits on. With recent changes under the Leasehold and Freehold Reform Act 2024, now is the perfect time to understand your rights and options.
Joseph Diver, Solicitor in our Commercial Property and Corporate team at Bromleys, answers key questions and explains why buying your freehold could be a smart move.
What’s the Difference Between Leasehold and Freehold?
Leasehold: You own the property for a fixed term, often 99, 125, or 250 years, but not the land beneath it. You may pay ground rent and need the freeholder’s consent for major changes.
Freehold: You own the property and the land outright, with no time limit. This is the most secure form of ownership.
Why Should You Buy Your Freehold?
Full Control Over Your Home: No more asking permission for extensions or alterations.
No Ground Rent: Escalating ground rents can make mortgages harder to secure. Buying your freehold eliminates this cost.
Increase Property Value: Freehold homes are more attractive to buyers and easier to sell.
No Lease Expiry: Short leases reduce property value and limit mortgage options. Freehold ownership removes this risk.
What Has Changed Under the Leasehold Reform Act 2024?
The Act introduces major reforms:
- Two-Year Rule Removed: You no longer need to own the property for two years before buying the freehold. This reform has come into effect in January 2025.
- Marriage Value Abolished: Previously, leases under the 80 years attract extra costs to purchase the freehold. This premium is now gone meaning lower costs for freehold
- Ground Rent Capped: When calculating the cost of buying your freehold or extending your lease, the formula now assumes ground rent is capped at 0.1% of the property’s value. This reduces premiums for leases with high or escalating ground rents.
- Freeholders Fees : Leaseholders will no longer have to pay the freeholder’s legal or valuation costs when buying the freehold. Each party will cover their own costs, reducing the financial burden on leaseholders.
These changes aim to make enfranchisement simpler and more affordable. However, some provisions are still being phased in, so timing matters.
Am I Eligible to Buy My Freehold?
To qualify:
- Your property must be a house (not a flat).
- The original lease term must exceed 21 years.
- You must own the property. The previous two-year ownership requirement was removed in January 2025, making the process easier than ever.
Thinking About Buying Your Freehold?
If you’re in Tameside or Greater Manchester, Bromleys’ Commercial Property team can guide you through the process, check eligibility, and help you avoid costly mistakes.
Call us on 0161 330 6821 or email bromleys@bromleys.co.uk to speak to an expert today.