Lease Extension and Collective Enfranchisement

Lease Extension and Collective Enfranchisement

Covering Bournemouth, Poole and the surrounding areas of Dorset and Hampshire, our lease extension and collective enfranchisement services ensure your property achieves its full market value instead of a discounted price.

When is a lease extension necessary?

In the vast majority of cases, properties with more than 90 years left on the lease are still perfectly saleable and will achieve full market value. However, a property with a remaining lease of 85 years or less can cause problems as purchasers express reservations and mortgage companies become reluctant to lend. Once the term of a lease drops below 80 years these problems become greater still and extending a lease becomes increasingly expensive. To avoid these problems, a lease extension may be necessary.

The leasehold extension process

The leasehold extension is obtained through negotiation between the freeholder and leaseholder or, on a statutory basis, in accordance with the 1993 Leasehold Reform, Housing and Urban Development Act. Our team of experts will be able to advise you as to which is the most cost-effective option for your particular circumstances.

To qualify as an eligible leaseholder you must have been the legal owner of a long lease (a lease in excess of 21 years when granted) for at least two years.

The freeholder will be entitled to compensation for extending the lease. This is normally to cover:

  • Reduction in value of the freeholder’s interest.
  • A share of the marriage value created by extending the lease.
  • Compensation for diminution of value to any other property owned by the freeholder that results from granting the leasehold extension.

Depending on the type of property, the above statute may grant the right to extend your lease by up to 90 years, during which you will only be required to pay a ‘peppercorn rent’ (effectively no rent at all). Securing a longer lease will also increase the value of your property.

Collective enfranchisement

In situations where a group of leaseholders occupy the same freehold – the most common being a group of flat owners – it is possible for the leaseholders to compel the sale of the freehold and become joint owners of the freehold interest. This process is known as collective enfranchisement.

In order to qualify for leasehold enfranchisement of your property, the following conditions must be met:

  • At least 50% of leaseholders must be participating
  • At least two thirds of the flats must be leasehold
  • No more than 25% of the internal floor space can be allocated for non-residential use
  • The building must contain two or more flats.

As in lease extensions, the freeholder is entitled to compensation for lost ground rent and the reversion of ownership that results from enfranchisement. Further, the freeholder is also entitled to compensation for any land or property lost that was not covered by the lease. Typical examples may be roof spaces and garden areas – especially if these have development potential.


“I just wanted to once again say thank you and your team for your assistance with this matter, you have made the whole process so overwhelmingly stress-free and simple I hope that you will be pleased to hear that I have recommended you to a number of other leaseholders within the building who I am aware are looking to undertake the same process in the near future.” Chris – leaseholder in Poole

“Peter Davy brilliantly handled my lease extension negotiations with the landlords surveyor as they totally over valued it. Peter agreed a realistic figure with the landlord. I could not be happier with the professional service I received and would highly recommend anyone to use their services, I certainly will in the future. Thank you so very much Peter.” Colin – leaseholder in Bournemouth

At James and Sons we offer a comprehensive service to assist leaseholders in acquiring a share of the freehold interest in their property through collective enfranchisement.

Do you want to know more about lease extension or collective enfranchisement in Dorset & Hampshire?

Call our team on 01202 673131 or make an enquiry.