Leasehold enfranchisement gives leaseholders the statutory right to extend their lease or collectively purchase the freehold. For buy-to-let landlords who own leasehold flats, these rights protect and enhance asset value. The Leasehold Reform and Freehold Act 2024 (LRFA 2024) removed the two-year ownership qualification for lease extensions and increased the standard extension term to 990 years.
Statutory lease extension
A qualifying leaseholder can extend their lease by 990 years (up from 90 years under the 1993 Act), replacing existing ground rent with a peppercorn for the full extended term. The leaseholder pays a premium to the freeholder calculated by statutory valuation. LRFA 2024 also aims to reduce premium calculation rates, potentially lowering costs for many leaseholders.
The 80-year threshold — act now
When a lease falls below 80 years, 'marriage value' (50% of the additional value created by combining the lease and freehold) is added to the premium. A property with 81 years may cost £8,000 to extend; the same property at 79 years could cost £25,000+. Landlords with leases approaching 85 years should take specialist advice immediately.
Collective enfranchisement
At least 50% of qualifying leaseholders in a building must participate to collectively purchase the freehold. Benefits include control over service charges and management, ability to grant 999-year lease extensions to participating flats at nominal cost, and significant capital value uplift. Costs include a premium, solicitor fees, valuer fees, and Land Registry registration.
Process overview
- Instruct a specialist ALEP solicitor
- Commission a RICS leasehold valuation for premium assessment
- Serve formal Section 42 notice on the freeholder
- Freeholder serves counter-notice (2-month deadline)
- Negotiate premium — most cases settle within 3–6 months
- If no agreement, refer to First-tier Tribunal (Property Chamber)
- Complete and register the new lease at Land Registry