Collective enfranchisement & freehold valuations
Collective enfranchisement is the right for leaseholders in a block of flats to join together and buy the freehold. We provide independent, Red Book valuations covering collective enfranchisement under the 1993 Act and Section 5 right-of-first-refusal sales under the 1987 Act — acting for leaseholders and freeholders alike, across London and the South East.
"Whether you're buying a freehold or responding to a claim, you need a clear figure and a clear strategy. We give you both, in plain English, so you can move forward with confidence."— Richard Stacey MRICS, Director and RICS Registered Valuer
What is collective enfranchisement?
It is the statutory right, under the Leasehold Reform, Housing and Urban Development Act 1993, for the leaseholders in a building to club together and buy the freehold from their landlord — at a price set by a statutory formula, which the freeholder cannot simply refuse.
Once the purchase completes, the participating leaseholders own the building through a freehold company they control, and can grant themselves long lease extensions, reduce ground rent to zero, and take charge of maintenance and service charges. We are instructed by leaseholders pursuing a claim and by freeholders responding to one or selling their interest — providing the same independent, Red Book-compliant valuation whichever side we act for.
Thinking about a lease extension too?
Every collective enfranchisement valuation we produce includes estimated lease extension figures for each individual flat, at no extra cost. So if the group decides not to proceed, each leaseholder already has the advice they need to extend their own lease — no second valuation required.
Own a leasehold house, not a flat?
Houses are dealt with separately, under the Leasehold Reform Act 1967, which sets its own valuation rules. We cover that on a dedicated page.
The benefits of owning the freehold
For leaseholders, acquiring the freehold transfers control of the building from the landlord to the flat owners. The main benefits are:
Protect value
As a lease shortens, value normally falls. Owning the freehold lets the flat owners grant long leases and arrest that decline.
Share of freehold
A "share of freehold" flat is more attractive to buyers and lenders, improving marketability.
Ground rent to zero
Once the leaseholders own the freehold, ground rent can be reduced to a peppercorn — effectively nothing.
Control of costs
The owners take charge of maintenance, insurance and the service charge account, rather than relying on a landlord.
Development value
Owning the freehold can unlock potential in lofts, basements or airspace that a freeholder would otherwise retain.
Other interests
The group may be able to acquire flats or interests still held by the freeholder as part of the purchase.
Freehold vs leasehold: what's the difference?
| Question | Freehold | Leasehold |
|---|---|---|
| How long is it owned for? | Forever — the property and the land it stands on, with no time limit. | For a fixed term. When the lease ends, the property reverts to the freeholder. |
| Alterations? | Subject to the law and any co-freeholders' agreement. | The lease often requires the landlord's written consent, which may be charged for. |
| Ground rent? | None. | Yes, in almost all cases — and some older leases double over time. |
| Mortgageability? | In most cases, straightforward. | Depends on lease length — many lenders won't lend below around 70 years. |
Collective enfranchisement: who qualifies?
Most blocks of flats qualify. The main conditions are:
- The building must contain at least two flats.
- At least two-thirds of the flats must be held by qualifying tenants on long leases (originally granted for more than 21 years).
- At least half the qualifying leaseholders must take part. In a two-flat building, both must participate.
- No more than 25% of the internal floor area may be non-residential (commercial).
The Leasehold and Freehold Reform Act 2024 will raise the non-residential limit to 50%, bringing more mixed-use buildings within reach — but that change is not yet in force. We confirm whether a building qualifies before anyone commits.
How does the process work?
Leaseholders serve notice
The participating leaseholders' solicitor serves a Section 13 notice on the freeholder, setting out the proposed terms and a premium informed by a chartered surveyor's valuation.
The freeholder responds
The freeholder serves a Section 21 counter-notice, accepting or giving reasons to disagree, and may propose leaseback terms — informed by their own surveyor's valuation.
The surveyors negotiate
The two surveyors negotiate the premium and terms, each side bearing its own costs of negotiation. Between two and six months after the Section 21, either side can apply to the First-tier Tribunal for a binding determination.
The freehold transfers
Nearly all cases settle by agreement, and solicitors complete the transfer of the freehold. If the Tribunal determines the terms instead, it gives directions to complete.
If the landlord cannot be located or fails to respond, the leaseholders can apply to the County Court for a vesting order — see "missing landlords" below.
Acting for leaseholders and freeholders
We act for both sides. As RICS Registered Valuers we give independent, Red Book-compliant advice whichever side appoints us — the underlying valuation principles are identical, so we understand exactly how the other side will approach the figures.
Buying the freehold
We value the premium, advise on strategy, and support a claim from the Section 13 notice through to completion or Tribunal.
Responding or selling
We value your interest so you can answer a claim on firm ground, or sell by agreement or under Section 5 — fairly and on the evidence.
Section 5 valuations & the Right of First Refusal
A freeholder may choose to sell their interest independently of any enfranchisement claim. Under Section 5 of the Landlord and Tenant Act 1987, they must usually first offer it to the qualifying leaseholders — the Right of First Refusal — where at least half the building is residential and at least half is owned by qualifying tenants of two or more flats. There are exceptions, including councils, housing associations and resident landlords of over a year. We provide Section 5 valuations for either side, whether you are a freeholder serving a notice or a leaseholder who has received one.
Simple sale by contract
The landlord sets a price the tenants can accept or decline. At least half the qualifying tenants must accept and then nominate a purchaser — often a company they set up. The interest can't then be sold cheaper or on different terms within a year.
Sale by public auction
Tenants are notified of the auction in advance and may take up the right of pre-emption. The price is set by the winning bid, which the tenants can then choose to match. Setting the reserve carefully is critical to a clean sale.
What if the landlord is missing or absent?
A freehold can still be bought even where the landlord is hard to deal with. We regularly help in these situations:
Untraceable landlord
If the landlord can't be found after reasonable efforts, the premium can be set by applying to the County Court for a vesting order. We provide the expert report advising on a suitable premium.
Bankrupt or in receivership
Where the landlord is bankrupt or their company is in receivership, the freehold can still be acquired — we advise on value and approach.
Company struck off
If the landlord's company has been struck off, its assets may pass to the Crown as "bona vacantia". In our experience the Treasury Solicitor will often sell or extend by negotiation.
Administrative restoration
If a freehold company has been struck off, it can sometimes be restored to the register through administrative restoration.
How is the price calculated?
The premium is built up from a few core elements. Part of a surveyor's job is to evidence and negotiate each one — and the figures move depending on which side is instructing.
Loss of ground rent
The ground rent the freeholder gives up is "capitalised" — converted into a single value payable today. The yield applied directly affects the figure.
Loss of the reversion
The freeholder's right to get the building back at the end of the leases. Its value reflects what the market would pay today for that future right — again, driven by the yield.
Relativity
The relationship between a short-lease value and a long-lease or freehold value. With little direct evidence, surveyors rely on relativity graphs — choosing and arguing the right one is a key area of expertise.
Marriage value
The uplift created by moving from short leases to long ones. Under current law it is shared 50/50 with the freeholder once a lease falls to 80 years or below; above 80 years none is payable.
We also review relevant Tribunal decisions for evidence on yields and relativity, check the leases for points that affect the premium, and ensure any qualifying improvements are properly disregarded.
The First-tier Tribunal
If a premium can't be agreed, either side can ask the First-tier Tribunal for a binding determination. Applications are common, but a full hearing is rarely needed — the system is designed to push both sides towards a fair compromise, with surveyors exchanging calculations and a statement of agreed and disputed facts as the hearing approaches.
Once an application is made, both surveyors owe a duty to the Tribunal and can no longer take pure negotiating positions. We only recommend going to the Tribunal when it's genuinely the right call — weighing the likely outcome against the cost.
Our experience at Tribunal
Contested premiums turn on the hardest valuation questions — development value, relativity and yield. Our director Richard Stacey MRICS gives expert valuation evidence before the First-tier Tribunal, and that depth of evidence works for whichever side instructs us.
A collective enfranchisement decided on development value
Acting as the leaseholders' valuation expert, Richard Stacey appeared in a collective enfranchisement dispute that turned entirely on the value of the airspace above the building. The freeholder argued the premium should carry £225,000 of development value; the First-tier Tribunal determined just £40,000 — and rejected the freeholder's attempt to enlarge the claim by treating an adjacent building, held by an associated company, as part of the same economic entity.
Where leasehold reform stands
The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024, but its main valuation reforms — including abolishing marriage value, capping ground rent in the calculation, and introducing prescribed deferment and capitalisation rates — are not yet in force. They await secondary legislation, with late 2026 the earliest realistic date and 2027–2028 widely expected. The High Court dismissed the freeholders' challenge to the reforms in October 2025.
Until commencement, the current law continues to apply. Our advice is based predominantly on the current operational law, and we explain how the proposed changes could affect a decision — so each party chooses on the numbers, not the headlines.
Enfranchisement & freehold valuations
Fees depend on the number of participating leaseholders and separate interests, the lease lengths, any development value and whether there's a commercial element. For larger groups, fees can run to a few thousand pounds. The same guide applies whether we act for leaseholders or freeholders, across collective enfranchisement (1993 Act) and Section 5 (1987 Act).
Get a tailored quoteWhen we carry out an enfranchisement valuation we include estimated lease extension figures for the individual flats at no extra cost, so each leaseholder can compare joining the freehold purchase against extending their own lease.
Enfranchisement & freehold FAQs
Is collective enfranchisement the same as a lease extension?
No. Collective enfranchisement is the leaseholders in a block joining together to buy the freehold of the whole building under the 1993 Act. A lease extension is one leaseholder extending their own flat's lease. Many groups weigh the two against each other — and when we value an enfranchisement we include estimated lease extension figures at no extra cost.
Do you act for leaseholders or freeholders?
Both. We are regularly instructed by leaseholders pursuing a claim and by freeholders responding to one or selling their interest. As RICS Registered Valuers we give the same independent, Red Book-compliant advice whichever side appoints us — the underlying valuation principles are identical.
Who qualifies to buy a freehold by collective enfranchisement?
Most blocks qualify. The building must contain at least two flats; at least two-thirds must be held by qualifying tenants on long leases; at least half the qualifying leaseholders must take part; and no more than 25% of the internal floor area may be non-residential. We confirm qualification before anyone commits.
How is the cost split between leaseholders?
The premium and professional fees are usually shared between the participating leaseholders, often in proportion to the benefit each receives or by agreement among the group. Leaseholders who don't take part do not contribute and do not gain a share of the freehold.
What about leaseholders who don't take part?
They keep their existing leases and don't share in the freehold, though the new freehold company can often grant them a lease extension later. At least half the qualifying leaseholders must participate for a claim to proceed.
Can a leaseholder buy the freehold of a house?
Yes, but houses fall under a separate regime — the Leasehold Reform Act 1967 — with its own valuation rules. See our dedicated leasehold houses page for how that works.
What is a Section 5 notice, and is one needed to sell a freehold?
Under Section 5 of the Landlord and Tenant Act 1987, a freeholder selling their interest must usually first offer it to the qualifying leaseholders — the Right of First Refusal — where at least half the building is residential and at least half is owned by qualifying tenants. There are exceptions, including councils, housing associations and resident landlords of over a year.
How will the 2024 reforms change the premium?
The Leasehold and Freehold Reform Act 2024 is expected to abolish marriage value, cap ground rent in the calculation, and set prescribed valuation rates — which would change premiums for many buildings. As of June 2026 those provisions are not yet in force, so current law continues to apply.
How much do you charge?
From £800 + VAT. Fees depend on the number of participating leaseholders and separate interests, the lease lengths, any development value and whether there's a commercial element. For larger groups, fees can run to a few thousand pounds.
Plain English, every time
Valuation can be complex, but you shouldn't need to be a chartered surveyor to understand the advice. We strip out the jargon and explain things in plain English — and if anything still isn't clear, our team is on the end of the phone, happy to help.
Every valuation is carried out by an RICS Registered Valuer in accordance with the RICS Valuation – Global Standards (the "Red Book"), so you can rely on consistency, objectivity and transparency throughout.
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Tell us about the property
Share a few details about the property and your position, and we'll come back with a tailored quote. Whether you're a leaseholder, a group of leaseholders or a freeholder, the more you can tell us, the more precise we can be. Prefer to talk it through first? Call us on 020 8017 1943 or email info@websterssurveyors.co.uk.
This page was written in June 2026.