Advice 3

We Provide High Quality & Cost Effective Leasehold and Freehold Services

Should We Extend Leases First or Buy the Freehold?

This is one of the most common questions we are asked by flat owners in smaller blocks.
If several leases in the building are shortening, should you:

Extend your individual leases first?
Pursue collective freehold enfranchisement?

The answer is not always straightforward. It depends on lease lengths, numbers participating and long-term strategy.

Option 1: Extend Leases First

Individual lease extensions may make sense where:

Only one or two leases are short
Other leaseholders are not ready to act
You need to protect a sale or mortgage application

A statutory lease extension adds 90 years and reduces ground rent to a peppercorn.

Option 2: Buy the Freehold First (Collective Enfranchisement)

If enough qualifying leaseholders participate, purchasing the freehold can sometimes be more efficient.
When the freehold is acquired:

The participating leaseholders control the building
Participating leases should all be extended to 999 years immediately
Long-term value is protected

But it requires cooperation and careful structuring between leaseholders.

Key Factors to Consider

The right approach depends on:

The length of each lease
Whether any leases are below 80 years
Ground rent levels
The number of participating flats
The relationship between leaseholders
The financial position of the group

There is no one-size-fits-all answer.

The Risk of Getting It Wrong

Proceeding without proper valuation advice can lead to:

Paying more than necessary
Poor timing decisions
Disputes between leaseholders
Missed opportunities for cost efficiency

A building-level strategy is often more cost-effective than several isolated decisions.

Specialist Advice Matters

Both lease extensions and freehold enfranchisement are governed by statutory valuation principles.
The interaction between the two can be complex.
We regularly advise leaseholders on:

Whether to extend or enfranchise first
The likely premium under each option
The most cost-effective strategy for the building

Sometimes the best answer is to extend first.
Sometimes it is clearly to enfranchise.
Often it requires detailed analysis.

Not Sure Which Route Is Right?

If you and your fellow leaseholders are considering your options, I offer a free 15-minute consultation to help you understand the likely position.
Clarity at the outset can save significant cost later.