Freeholds and Ground Rent Advice: Sales and Purchases

If you are looking for specialist legal advice relating to the sale or purchase of freehold interest, or advice relating to ground rents, the experts at Clough & Willis Solicitors are here for you.   

Our dedicated property law team have many years of experience acting on behalf of clients in the sale or purchase of freehold interest, and will be able to guide you through the process efficiently and quickly. 

To speak to our team, based in Bury and Bolton, about how we can help you, call 0800 083 0815 or complete the online enquiry form on the side of this page and we will get back to you.

What are leaseholds, freeholds and ground rents?

Freehold and leasehold are the two types of property ownership in the UK. Freehold means owning the property and the land it is built on outright, which gives the owner full responsibility for maintenance and the freedom to modify it as they wish. There are no annual fees associated with freehold properties.

Conversely, a leasehold grants ownership of the property for a specified period, typically 99 to 125 years, but not the land. Leaseholders must pay an annual ground rent to the freeholder and may need permission for significant alterations. Ground rent is typically used by the freeholder to cover administrative costs and the management of the leasehold property.

Purchasing the freehold can eliminate the obligation to pay ground rent and provides more control for the property owner. It can also simplify the sale process, especially because the short lease terms sometimes associated with leasehold properties can deter mortgage lenders.

Benefits of purchasing freehold interest

In light of recent press coverage of the leasehold issues faced by those purchasing new build properties, many people are reluctant to purchase leasehold titles themselves, even when the ground rent is only for a minimal amount.

There are many reasons you may wish to purchase your freehold. For example, it will mean you will no longer have to pay the annual ground rent referred to above. If you want to extend your property or make structural alterations for which your lease requires the landlord’s consent, buying the freehold means you will no longer need to obtain this.

Once your freehold purchase is finalised, the terms of the lease will still apply, but, as the freeholder, you will effectively be granting any consent required of the freeholder noted under the lease to yourself.

In addition, where the initial lease was granted for a short term (for example, 99 years rather than 125), some mortgage companies can be reluctant to grant mortgages. This is especially true if there is only a short time left on the lease, and this can create problems for prospective purchasers during the buying process. Freehold ownership eliminates this problem.

How to buy the freehold of a leasehold property

1. Check if you meet the criteria for buying the freehold, especially for flats requiring collective enfranchisement. If applicable, work with fellow leaseholders to form a collective enfranchisement group.
2. Initiate negotiations with the freeholder to agree on a purchase price, considering factors like the remaining lease term and ground rent.
3. Serve a formal notice to the freeholder once a price is agreed.
4. Engage in a valuation process if necessary.
5. Obtain legal advice from a solicitor experienced in freehold acquisitions to manage legal complexities.
6. Agree on the terms, exchange contracts, and complete the transfer.

How we can help

If you have been approached by your freeholder or have contacted them and agreed a price to purchase the freehold, we can act on your behalf in the purchase. The team at Clough & Willis has a wealth of experience in property conveyancing, negotiating property transactions and managing freehold purchases.

If you are considering your options as either the current freeholder or someone who wants to purchase the freehold interest, we can offer you all the advice you need to come to an informed decision, with your best interests secure.

Our leasehold and freehold purchase solicitors

With Clough & Willis, you can be assured that the expertise of our specialist professionals will be leveraged to secure the best possible outcome. With a high level of service, strong communication and continuity of service (meaning you will deal with the same person throughout), you can trust us to handle the legal requirements of your property transaction. Our support makes the process as simple, straightforward and stress-free as possible.

At Clough & Willis, our investment in understanding your specific needs ensures we deliver consistent and personalised service to every client. We can provide legal advice and guidance in the following areas:

• Right to manage claims
• Collective enfranchisement for flat owners - Buying a share of the freehold in blocks of flats
• Sale and purchase of freeholds/ground rents
• Statutory commercial lease renewals
• Buying a new build home
• Buying a residential property - conveyancing
• Selling a residential property - conveyancing
• Land transactions and rights of way
• Residential tenancy agreements
• The Conveyancing Quality Scheme (CQS)
• Equity release

Clough & Willis is also Independent from bank or estate agency ownership, which means there are no referral fees to third parties. You should insist on all of the above as a minimum when dealing with what is probably your biggest investment - your home.

We strive to minimise the stress involved in buying or selling a property. We are always available by phone if needed, and you will deal with the same person throughout your case. Whether you are a first time buyer or own an entire property portfolio, every client is important to us, and we aim to provide a personal service with competitive pricing.

Whether you want a free, no-obligation conveyancing quote or an initial consultation about another property law issue, our team of expert freehold purchase solicitors is always on hand to help.

FAQ

What are the different options for leasehold enfranchisement?

Leasehold enfranchisement gives leaseholders options to gain ownership of the freehold of their property. The most common route is collective enfranchisement, where leaseholders of flats band together to purchase the freehold of the building. This requires the participation of at least half of the leaseholders and is governed by specific legal criteria.

Another option is lease extension, which allows individual leaseholders to extend their leases by up to 90 years beyond the remaining term, and reduce ground rent to a nominal amount. This process involves valuation and negotiation with the freeholder, and professional legal advice is highly recommended to ensure a fair and smooth transaction.

Each method has its own legal and financial implications, making it important to consult with experienced property law solicitors to navigate the complexities and achieve the best outcome.

What are my options for collective enfranchisement?

There are two main options for purchasing the freehold to your property under collective enfranchisement:

1. Statutory Collective Enfranchisement: This is the most common route, and is governed by the Leasehold Reform, Housing and Urban Development Act 1993. Leaseholders serve an initial notice to the freeholder, negotiate a price, and proceed through a formal legal process. Professional legal and valuation advice is important to meet the legal requirements of collective enfranchisement and navigate its complexities, to ensure a fair outcome.
2. Voluntary Agreement: In some cases, leaseholders can negotiate directly with the freeholder without following the statutory process. This can be quicker and less formal but requires mutual agreement on terms and price.