Your Guide To Freehold Purchase Legislation

With all the talk around Freehold and Leasehold Reform throughout 2024, you might be wondering if freehold purchase legislation has changed or is changing. Fret not, we’re on top of it. We’re always keeping an eye on and contributing to the state of freehold purchase law in the UK, because that’s what we do: help leaseholders buy their freeholds.

In this guide, we’re going to take a closer look at the current freehold legislation in the UK, and see if any changes are actually on the cards now that there’s been a bit of a push for reform in the sector.

Legislation on paper is one thing. How it plays out under time pressure is another. This guide sets out the full framework; who qualifies, how the process works, and what the 2024 reforms have changed. 

What is Freehold Purchase Legislation?

Freehold purchase is the process where leaseholders buy the freehold of their property, giving them full ownership of the land and building. In the UK, freehold purchase legislation sets out the rules for this process, ensuring leaseholders have a clear framework to acquire greater control over their property, avoid those eye-watering ground rents, and eliminate leasehold restrictions.

Many leaseholders are looking to buy the freehold of their building to escape rising costs or onerous terms tied to their leases. The process often involves collective enfranchisement, where multiple leaseholders in the building come together to buy their freehold. There’s usually a need for all leaseholders to be in agreement, plus a valuation, and some negotiations with the freeholder.

Freehold purchase legislation is key to guiding this complex process and making sure everything runs fairly and transparently, with a clear way to resolve any disputes that pop up along the way.

Current Freehold Purchase Legislation in the UK

The primary legislation governing freehold purchase in the UK includes:

• Leasehold Reform Act (1967)
• Leasehold Reform, Housing and Urban Development Act (1993)
• Commonhold and Leasehold Reform Act (2002)
• Ground Rent Act (2022)
• Leasehold & Freehold Reform Act (2024)

These laws collectively regulate the eligibility, valuation, and procedure for leaseholders to acquire their freehold.

Leasehold Reform Act 1967

The Leasehold Reform Act 1967 is the original legislation granting qualifying leaseholders of houses in England and Wales the right to purchase the freehold of their property, a process known as “enfranchisement.”

Key regulations under this Act relate to Eligibility Criteria (Type of Property, Lease Conditions, Leaseholder Qualifications), Valuation and Pricing, Procedural Steps, and Costs and Legal Fees.

It’s important to note that the Leasehold Reform Act 1967 has undergone several amendments, in theory to simplify the enfranchisement process and expand leaseholder rights.

Leasehold Reform, Housing and Urban Development Act 1993

The Leasehold Reform, Housing and Urban Development Act 1993 grants leaseholders of flats in England and Wales the right to collectively purchase the freehold of their building through a process known as “collective enfranchisement.”

Key regulations under this Act relate to Eligibility Criteria (Qualifying Tenants and Building Requirements), Collective Enfranchisement Process, Apportionment of Costs and Premium Calculation, and Post-Purchase Rights and Obligations.

The provision that catches groups out most often is the qualifying tenant definition under Section 5. A leaseholder qualifies only if their lease was originally granted for a term of more than 21 years. Buy-to-let investors with older-style short residential lets, or flat owners who hold through corporate vehicles that cannot be quickly verified, can disrupt the participant count at exactly the wrong moment.

Commonhold and Leasehold Reform Act 2002

The Commonhold and Leasehold Reform Act 2002 introduced significant changes to property ownership in England and Wales, particularly relating to the purchase and management of freehold properties. Key provisions include Introduction of Commonhold, Right to Manage (RTM), Leasehold Enfranchisement Reforms, and Ground Rent Regulations.

These reforms aimed to provide leaseholders with more control over their properties and promote the adoption of commonhold as an alternative to leasehold ownership. However, despite the introduction of commonholds, its uptake has been limited.

Ground Rent Act 2022

The Ground Rent Act 2022 primarily addresses ground rents in new long residential leasehold properties in England and Wales by abolishing ground rents for new leases. It does not directly govern regulations related to the purchase of freehold properties.

Leasehold & Freehold Reform Act 2024

The Leasehold & Freehold Reform Act 2024, though passed, is mostly not yet in force, and aims to streamline the process further. It introduces significant changes to property ownership laws in England and Wales, particularly concerning leasehold properties.

Key provisions related to freehold purchase and leasehold reform include Extended Lease Terms, Abolition of Marriage Value, Immediate Eligibility for Lease Extensions, and Standardization and Transparency in Costs.

While the Act received Royal Assent in May 2024, many of its provisions require secondary legislation and are likely to come into force between 2025 and 2028.

Proposed Changes and Reforms to Freehold Purchase Legislation in 2025/6

The UK government is keen to keep pushing the reforms to freehold purchase legislation in 2025/6, building on the work done with the 2024 Leasehold & Freehold Reform Act. Some key areas they’re looking to change include:

• Getting rid of ground rents entirely for new leasehold houses
• Simplifying the whole enfranchisement process for leasehold flats so it’s more straightforward
• Making valuation methods fairer and more transparent
• Upping the standard lease extension term to 990 years

These are all proposals at the moment but the government has got plenty of consultations and legislative discussions still to go through before anything is set in stone.

Closing Thoughts: Staying Informed

It’s really important to stay on top of legislative updates, because any changes could have a big impact on your rights and opportunities as a leaseholder. So get proactive, be prepared to act on any new developments.

The legislation’s protective power shows most clearly when leaseholders know it is there. In East Finchley, 11 out of 12 leaseholders at Garden Lodge Court received a Section 5b Notice: a notice of auction sale that triggers the right of first refusal under the Landlord and Tenant Act 1987. The residents barely knew each other before that notice arrived. TFC coordinated participation, conducted a valuation, and organised the group’s bid within weeks.

The leaseholders purchased the freehold at the auction price, matching their own pre-auction valuation. A developer was prevented from acquiring the building. The outcome depended entirely on the group acting within the strict statutory window and knowing they had the right at all. You can read the full Garden Lodge Court case on the TFC website.

At TFC, we’re experts in helping leaseholders buy the freehold to their property. If you have questions or need some professional guidance, our team is here to help.

Book a free consultation right to buy their freehold under UK law. However, there are certain criteria you need to meet, which usually depend on the type of property, length of lease and ownership details., length of lease, and ownership details.