If you own a leasehold property, switching to freehold ownership can be an attractive option. It gives you more control, fewer restrictions, and eliminates ground rent payments. But how much does it cost to convert leasehold to freehold - and is it worth it? In this guide, we’ll explain the key differences between leasehold and freehold, what affects the cost of buying your freehold, and how to decide if it’s the right move for you.
Understanding leasehold vs. freehold
Before diving into the costs, it’s important to understand the difference between leasehold and freehold:
Leasehold: You own the property for a set number of years, but not the land it’s built on. You pay ground rent, service charges, and other fees to the freeholder.
Freehold: You own both the property and the land it’s built on outright, with no time restrictions and typically avoid ongoing ground rent payments.
Many leasehold owners consider purchasing the freehold to gain full ownership and avoid rising costs and restrictions.
Purchasing freehold: What can affect the cost?
The cost of converting leasehold to freehold can vary significantly depending on several factors:
1. Length of the lease
The remaining length of your lease has a significant impact. If there are fewer than 80 years left on the lease, the cost of purchasing the freehold increases due to something called marriage value. This reflects the added value to your property once you convert to freehold.
💡Editor’s insight: “I’m often asked what 'marriage value' means. Essentially, marriage value represents a leasehold property’s increase in value when its owner purchases the freehold. The value of the leasehold property and the value of the freehold are ‘married’ to create a cost a leaseholder must may to purchase the freehold.”
2. Property type
The process and cost of buying the freehold can differ depending on whether you own:
A leasehold house: You can purchase the freehold under the Leasehold Reform Act 1967.
A leasehold flat: You’ll need to use collective enfranchisement, which requires multiple leaseholders in a building to purchase the freehold together.
3. Ground rent and service charges
If you pay high ground rent, this can increase the cost of purchasing the freehold. This is because freeholders are compensated for the loss of future ground rent income when they buy the freehold.
4. Property value
The higher the value of your property, the more expensive the freehold purchase will be. The freeholder may calculate the cost based on a percentage of the property’s market value.
5. Professional fees
You’ll need to factor in costs for professional services such as:
Surveyor fees to calculate the value of the freehold
Legal fees for the conveyancing process
Valuation fees to assess the cost of purchasing the freehold
How to calculate the cost
Calculating the cost of converting leasehold to freehold can be complex. It's always best to rely on a professional like a lease extension solicitor or property expert to support you. While the final figure depends on your circumstances, here’s a general approach to estimate the cost:
Start with the property value: The freehold cost is often calculated as a percentage of the property’s current market value.
Consider the lease length: If the lease has more than 80 years remaining, you won’t need to pay the marriage value. If the lease has fewer than 80 years, the marriage value will increase the cost, often significantly.
Factor in ground rent: The current value of future ground rent payments will also be added to the total cost. For example, if you pay £200 per year in ground rent, the freeholder will want compensation for losing that income.
Professional valuations: To get an accurate cost, it’s highly recommended to hire a qualified surveyor. Freehold solicitors calculate the value of the freehold using industry methods and legal standards.
💡Editor’s insight: “I find that the importance of a professional valuation is often underestimated. A specialised freehold valuation surveyor can ensure an accurate valuation and ensure you don’t end up out of pocket. They are skilled negotiators and will work on your behalf to achieve the most favourable terms."
Legal framework for leasehold enfranchisement
Leasehold enfranchisement is the legal process that allows leaseholders to purchase the freehold of their property. The laws governing this process differ for houses and flats:
For leasehold houses
Under the Leasehold Reform Act 1967, leaseholders have the legal right to purchase the freehold of their house if they meet specific criteria:
The property must be a leasehold house.
You must hold a long lease (originally granted for at least 21 years).
For leasehold flats
Flats operate under a process called collective enfranchisement, governed by the Leasehold Reform, Housing and Urban Development Act 1993. To purchase the freehold of a building with flats:
At least 50% of the leaseholders in the building must participate.
The property must qualify as a residential building with at least two flats.
If you and the freeholder can’t agree on the cost, you may need to apply to the First-tier Tribunal (Property Chamber) to resolve the dispute.
Is it worth purchasing the freehold of a leasehold house?
Converting a leasehold house to freehold offers several benefits, but whether it’s worth the cost depends on your individual circumstances. Here are some factors to consider:
Pros ✅ | Cons ❌ |
|---|---|
You’ll no longer have to pay annual ground rent to the freeholder unless a restrictive covenant is in place. | The process can be expensive, especially if the lease has fewer than 80 years remaining. |
You’ll have full control over the property and land without needing the freeholder’s permission for changes. | You’ll need to cover surveyor, solicitor, and valuation costs. |
Owning the freehold can make your property more attractive to buyers and increase its value. | Negotiations with the freeholder or disputes can add time and stress. |
You'll eliminate concerns about lease length, ground rent hikes, and high service charges. |
Should I extend my lease instead?
If purchasing the freehold isn’t practical, extending your lease is another option. Extending the lease:
Adds years to the remaining term (typically by 90 years for flats or 50 years for houses).
Reduces concerns about the lease falling below 80 years, which can impact property value.
May be more affordable than purchasing the freehold, depending on the circumstances.
However, extending a lease still means you’ll pay ground rent (unless renegotiated) and remain subject to freeholder rules.
FAQs
Can you turn a leasehold into a freehold?
Yes, you can convert leasehold to freehold by purchasing the freehold under leasehold enfranchisement laws. This process varies for houses and flats and involves negotiation with the freeholder.
Are there new leasehold laws in 2025?
The UK government has proposed reforms to improve fairness for leaseholders. Changes may include:
Reducing ground rent to zero for all new leases.
Simplifying the process for buying the freehold or extending leases.
While the exact details of the 2025 leasehold reforms are not finalised, they are expected to make the process fairer, more affordable, and accessible. We’ve written a guide to the planned leasehold reforms.
Is your house worth more if it’s freehold?
Yes, owning the freehold typically increases a property’s value and market appeal. Buyers are often willing to pay more for freehold properties to avoid ground rent, lease restrictions, and uncertainty.
Final thoughts
Purchasing the freehold of a leasehold property can eliminate ground rent, increase property value, and give you full control. Yet, it is worth remembering that the cost of converting leasehold to freehold can vary widely. Remember to factor in the remaining lease length, property value, and ground rent.
If you’re considering this step, it’s essential to understand the legal framework and calculate the costs. Seeking professional advice from a surveyor or property solicitor can help in both regards.
References
Leasehold reforms press release from Gov.uk