Extending your lease or buying the freehold: the two statutory routes for flat owners

What is the difference between a lease extension and buying the freehold?

Both routes are statutory. The lease extension is an individual right: a qualifying tenant of a flat can require the landlord to grant a new lease. Collective enfranchisement is a group right: qualifying tenants of flats in the same building can acquire the freehold through a person they appoint. The table sets out how the two compare on the current text of the Act.

Who qualifies for a lease extension?

The right to a new lease belongs to the qualifying tenant of a flat (section 39(1)). A qualifying tenant is a tenant of the flat under a long lease (section 5(1)), and sections 5 and 7 are applied to lease extensions by section 39(3).

A long lease includes a lease granted for a term of years certain exceeding 21 years (section 7(1)(a)). The right does not apply where the lease is a business lease (section 5(2)(a)).

One person can be the qualifying tenant of two or more flats at the same time, whether under one lease or several (section 39(4)). The right does not extend to underlying minerals if the landlord requires them to be excepted and proper support provision is made (section 39(7)).

Older guidance often describes a two-year ownership condition. That requirement was removed: section 27(2)(b) of the Leasehold and Freehold Reform Act 2024 omits section 39(2) of the 1993 Act, and the commencement regulations brought section 27 into force on 31 January 2025.

What must be true before the tenants can buy the freehold?

Collective enfranchisement applies to premises that meet the section 3 conditions. The premises must contain two or more flats held by qualifying tenants, and those qualifying tenants must hold not less than two-thirds of the total number of flats (section 3(1)(b) and (c)).

The non-residential test is in section 4(1). Premises are excluded where any part is neither residential nor common parts and that non-residential area exceeds 25 per cent of the internal floor area of the whole premises (section 4(1)(b)). Parts used with a residential dwelling, such as a garage, count as residential (section 4(2)).

The claim is made by an initial notice that must be given by qualifying tenants of flats in the premises numbering not less than one-half of the total number of flats(section 13(2)(b)(ii)). The freehold is then acquired by the appointed person on behalf of those tenants (section 1(1)).

How does a claim start?

A lease extension claim is made by giving the landlord a tenant’s notice under section 42. The landlord is then bound to grant a new lease where the tenant gives notice of the claim in accordance with section 42 (section 56(1)).

A collective claim is made by giving the initial notice under section 13.

What is marriage value, and when does it apply to a lease extension?

The premium for a new lease includes the landlord’s share of the marriage value, which is 50 per cent of the marriage value (Schedule 13, paragraph 4(1)). Marriage value is the difference between the combined value of the interests before the new lease and their combined value afterwards.

Where the unexpired term of the existing lease exceeds eighty years, the marriage value is taken to be nil (Schedule 13, paragraph 4(2A)). Marriage value can therefore arise where the unexpired term is 80 years or less. Our guide to lease extension costs covers the figures behind the premium.

What does the 2024 Act change, and is it in force?

The Leasehold and Freehold Reform Act 2024 changes the term of a new lease for flats. Section 33(2) would replace the 90-year term in section 56(1) of the 1993 Act with 990 years. As checked on 2 November 2026, the 990-year term is not in force: the page for section 33 is marked prospective.

The page for section 56 confirms the point. Its text still shows 90 years, because the substitution made by section 33(2) is not yet applied. The same is true of the premium change in section 56(1)(b), which section 36(3)(a) of the 2024 Act would substitute.

Section 34 of the 2024 Act, headed “Lease extensions under the LRA 1967 on payment of premium at peppercorn rent”, amends section 14 of the Leasehold Reform Act 1967, not the 1993 Act, and the page for section 34 is also marked prospective.

Which route should you consider first?

An individual lease extension is the simpler route when you are the only one who wants to act, because the right belongs to the qualifying tenant. A collective claim needs the building to meet the section 3 conditions and an initial notice from enough qualifying tenants.

Price is set separately under each route. For a lease extension, the premium is the one payable under Schedule 13. For a collective claim, the price is determined in accordance with Chapter 1.