If you own a leasehold flat, you’ve probably asked yourself this question: “Why go through the lease extension process when I could just buy the freehold?” It’s a valid query — and in some cases, buying the freehold may indeed be an option. However, there are legal, practical, and financial reasons why you may need to extend your lease first, or why freehold purchase might not be possible at all.
In this guide, we’ll explain the key differences between lease extensions and freehold purchases, outline the limitations of buying your freehold, and offer clear advice to help you make the right decision.
Leasehold vs. Freehold: The Basics
Leasehold
- You own the property (typically a flat) for a fixed term, but not the land it sits on
- Your lease has a set number of years remaining (e.g., 99, 125)
- You pay ground rent and service charges
- You must follow lease terms, which may restrict alterations or subletting
Freehold
- You own both the property and the land outright, forever
- No ground rent to pay
- Full control over property management (if a house)
- In blocks of flats, collective freehold (shared between leaseholders) is the norm
The Catch: Flat Owners Can’t Buy the Freehold Alone
If you own a flat, you can’t simply buy the freehold by yourself. Why?
Because the freehold includes:
- The land
- The structure of the entire building
- Communal areas (hallways, staircases, roofs, etc.)
This means buying the freehold is a collective process. You must:
- Coordinate with at least 50% of qualifying leaseholders in the building
- Initiate a process called collective enfranchisement under the Leasehold Reform Housing and Urban Development Act 1993
If you own a house (not a flat), you may be eligible to buy the freehold individually — a separate process called freehold enfranchisement.
Why Lease Extension Might Be the Better (or Only) Option
1. You Live in a Small Block or Unresponsive Neighbours
Collective enfranchisement requires group action. If you can’t get other leaseholders on board, you can’t buy the freehold.
2. Your Lease Is Short
If your lease is close to falling below 80 years, extending it quickly avoids marriage value. Freehold purchase often takes longer to arrange due to involvement of multiple owners and might not happen in time to avoid higher costs.
3. Freehold Purchase Doesn’t Remove Lease Restrictions
Even after collective enfranchisement, lease terms often remain in place unless varied. You’ll still need to:
- Follow restrictions in the lease
- Pay service charges (though you’ll have more control over them)
What Is Collective Enfranchisement?
Collective enfranchisement allows leaseholders in a building to join together and buy the freehold collectively. It gives you more control over the management and maintenance of your building.
Requirements:
- At least 50% of flats in the building must participate (in buildings of two flats, both leaseholders must participate)
- Each leaseholder must hold a long lease (originally over 21 years)
- The building must qualify (not too many commercial units, for example)
Even then, the process is:
- Lengthy (6–12 months)
- Can be Legally more complex
- Dependent on coordinating with multiple owners
Key Differences: Lease Extension vs Freehold Purchase
| Feature | Lease Extension | Buying Freehold |
| Individual or Group? | Individual | Group (flats) |
| Removes Ground Rent? | Yes (statutory route) | Yes |
| Extends Lease? | Yes (90 years) | No (unless you extend separately) |
| Controls Building? | No | Yes (shared among buyers) |
| Process Duration | 6–12 months | 6–12+ months |
| Simplicity | Easier | More complex |
FAQs
Can I just buy the freehold to avoid extending the lease?
No. You must extend your lease separately — buying the freehold does not automatically extend your lease but this can be done immediately after buying the freehold.
If I buy the freehold, will ground rent stop?
Yes — once you own the freehold, ground rent usually no longer applies as you will not have to collect it from yourself – although it is best to formalise this by amending the lease. But you may still pay service charges if managing common areas.
Can I do both at once?
Yes, but it’s usually better to extend first to avoid additional costs and complications.
Can my freeholder refuse to sell?
For collective enfranchisement, they can’t refuse if you qualify. For voluntary (informal) freehold purchase, they may decline.
Summary: Key Takeaways
- You can’t buy the freehold of a flat on your own — collective enfranchisement is required
- Extending your lease may be faster, cheaper, and simpler than buying the freehold
- Buying the freehold does not automatically extend your lease
Ready to Secure Your Lease the Right Way?
At Extension.Lease, we offer expert valuations, strategic advice, and comprehensive support whether you choose to extend, enfranchise — or both.
