Comparison Β· 2026/27
Lease Extension vs Collective Enfranchisement
Leaseholders facing a short lease or unwanted ground rent have two broad routes: extend their own lease individually, or join with neighbours to buy the freehold of the whole building through collective enfranchisement. This guide compares cost, process and outcome for each, including changes brought by the Leasehold and Freehold Reform Act 2024.
At a Glance
| Feature | Lease Extension | Collective Enfranchisement |
|---|---|---|
| Who acts | One leaseholder | Group of leaseholders (50%+) |
| What you get | Longer lease on your flat | Ownership of the freehold |
| Ground rent after | Reduced to peppercorn | You control it (usually removed) |
| Complexity | Lower | Higher β group coordination |
| Typical timescale | A few months | A year or more |
| Future management control | Unchanged | Leaseholders in control |
How Lease Extension Works
A statutory lease extension is a right for a qualifying leaseholder to extend their lease by adding years (now up to 990 years under the Leasehold and Freehold Reform Act 2024, once fully in force) and reducing ground rent to a peppercorn β effectively zero. The leaseholder serves a formal notice on the freeholder, a premium is agreed or determined by the First-tier Tribunal if disputed, and the new lease is completed.
This route is simpler because it involves only one leaseholder and one freeholder, with a well-established statutory process and valuation methodology. It does not change who owns the building\'s freehold or how it is managed β the same freeholder (or managing agent) continues to run the block after the extension completes.
How Collective Enfranchisement Works
Collective enfranchisement lets qualifying leaseholders β at least 50% of those eligible in the building β jointly buy the freehold through a nominee purchasing company set up for the purpose. Once complete, the leaseholders (through the company) own the freehold and can grant themselves very long leases at little or no premium, and decide how the building is managed going forward.
The process is more involved: organising fellow leaseholders, agreeing how costs and any future management responsibilities are shared, obtaining a single valuation for the whole building, and potentially negotiating (or litigating at Tribunal) with the current freeholder over price. It typically takes considerably longer than an individual lease extension but removes an external freeholder from the picture entirely.