Glossary · UK
What is Leasehold Enfranchisement?
A leaseholder's legal right to buy the freehold of their home or extend the lease, usually for a premium paid to the landlord.
Full Definition
Leasehold enfranchisement is the legal process by which leaseholders acquire greater control over their property, either by buying the freehold or by extending the lease. For houses, a qualifying leaseholder may be able to buy the freehold outright. For flats, leaseholders can either club together to buy the freehold collectively (collective enfranchisement) or individually extend their lease. Extending a lease matters because a shrinking term reduces a property's value and can make it harder to mortgage or sell, particularly once it falls below around 80 years, when an additional 'marriage value' cost can apply. The price (premium) payable to the freeholder is calculated using statutory valuation principles and often professional negotiation. Recent leasehold reform legislation has aimed to make extensions cheaper and standardise terms, though implementation has been phased. Because the figures depend heavily on lease length, ground rent and property value, leaseholders should obtain a specialist valuation before proceeding.