Leasehold enfranchisement

Leasehold enfranchisement valuation is one of our core specialisms. Richard Kay FRICS and Henrietta Hammonds FRICS FCIArb have a combined experience of over forty years in this field, acting as expert valuers and expert witnesses for both landlords and tenants in disputes and negotiations. The firm is a member of ALEP — the Association of Leasehold Enfranchisement Practitioners – and Henrietta is also a Non-Executive Director. 

The right to enfranchise 

Most people who own a flat have statutory rights under the Leasehold Reform Housing and Urban Development Act 1993 (as amended). These give them two options: 

• get an extra 90 years on their lease and eliminate all ground rent (a statutory lease extension); or 

• band together with a majority of other flat owners in the block to buy the freehold (collective enfranchisement). 

Most flats and most flat owners qualify, though there are rules about eligibility. Crucially, the landlord can be compelled to go along with it. 

Houses are less commonly enfranchised, but they have their own legislation — the Leasehold Reform Act 1967 (as amended) — and we are experienced in dealing with those too. 

The valuation 

When someone asks “do you own your flat?”, the answer is usually “yes” — but the technical position is more nuanced. The flat owner has an interest in the property (the right to live there, let it and sell it for the duration of the lease), but so does the landlord (the right to receive ground rent and to get the property back when the lease expires — known as the reversion). That landlord’s interest has a value, and it wouldn’t be right to take it away without paying for it. 

The premium is calculated by reference to: 

• the value of the landlord’s interest (ground rent and reversion); 

• marriage value — the extra value created by the transaction itself, split equally between landlord and tenant (disregarded where the lease has more than 80 years to run); and 

• in collective enfranchisement, the value of any other interests in the block not belonging to participating tenants. 

It’s a specialised area, frequently involving hypothetical valuation scenarios and requiring detailed knowledge of the legislation and tribunal decisions. 

Our role 

We act for both landlords and tenants — the valuation principles are the same for both sides. Our work typically includes: 

• calculating and advising on the premium payable; 

• advising on tactics and strategy, particularly in collective enfranchisement cases; 

• acting as expert witnesses in the Upper Tribunal (Lands Chamber) and First-tier Tribunal (Property Chamber); 

• working alongside solicitors and barristers throughout. 

The Leasehold and Freehold Reform Act 2024 

The Leasehold and Freehold Reform Act 2024 has received Royal Assent and will introduce a new Standard Valuation Methodology for most lease extensions and enfranchisements. Those provisions are not yet fully in force, and the previous methodology continues to apply in the meantime. We advise on the potential impact of the 2024 Act in all cases.