Seen “share of freehold” on a flat listing and wondered whether it is better than leasehold, and what you would actually be taking on? This guide explains share of freehold in plain English for 2026: what it means, how it works day to day, the pros and cons, what happens with lease extensions and insurance, how leaseholders buy a share of the freehold in the first place, and how the current leasehold and commonhold reforms affect your decision. It is written by the Survey Merchant team, whose nationwide panel of suitably qualified, accredited surveyors (regulated or accredited by bodies such as RICS, CIOB and RPSA) values freeholds and lease extensions every week.
Share of freehold means a flat is owned on a long lease and the leaseholder also holds a share in the freehold of the building that contains it. The freehold is either held jointly by up to four flat owners as individuals, or by a limited company in which each flat owner is a member. Together, the flat owners act as their own landlord.
The critical point that trips up many buyers is that share of freehold is not a third type of tenure. Legally, your flat is still leasehold. There is no such thing as the freehold of an individual flat in England and Wales; only the building has a freehold. What changes is who owns that freehold. Instead of an outside investor or ground-rent company, it is you and your neighbours.
The lease is still needed because it sets out who repairs what, how costs are shared and what each owner can and cannot do. The Leasehold Advisory Service (LEASE), the government-funded advice body, stresses that owning a share of the freehold gives flat owners a range of benefits as well as responsibilities. If you are still getting to grips with the basics, our guide to leasehold vs freehold is a good starting point.
In practice, the freehold owners (or the company) take on the landlord’s duties under the leases: arranging buildings insurance, organising repairs to the roof, structure and common parts, collecting service charges, and keeping accounts. In small buildings this is often done informally between neighbours; larger blocks typically appoint a managing agent.
Three practical questions decide whether a share-of-freehold building runs smoothly:
| Advantages | Disadvantages |
|---|---|
| No external landlord: decisions on repairs, contractors and insurance are made by the people who live there. | Shared responsibility: if one owner will not co-operate or pay, everyone else carries the problem. |
| Ground rent is usually reduced to a peppercorn (nil) when the freehold is acquired. | You still pay service charges; they are simply paid to your own company or shared account. |
| Leases can be extended to 999 years for little or no premium, protecting value and mortgageability. | An extension still needs a formal deed and every freeholder’s agreement, so an absent or obstructive co-owner can block it. |
| Flats with a long lease and a share of freehold are generally easier to sell and finance. | Company administration and directors’ duties; failure to file at Companies House can lead to strike-off and fines. |
| Transparency: you can see exactly what insurance and maintenance cost. | Disputes between neighbours can be harder to resolve than a formal complaint against a professional landlord. |
The problems our surveyors see most often are a short lease that nobody thought to extend when the freehold was bought; a freehold company that has been dissolved for non-filing; no buildings insurance or under-insurance because nobody updated the reinstatement value; and a running feud between two flats over a leaking roof. Most are avoidable with a written participation agreement, a simple reserve fund, an annual meeting and an up-to-date insurance reinstatement cost assessment so the building is insured for what it would actually cost to rebuild.
For most owner-occupiers in a small, well-run building, yes. Government data shows why control matters: in 2024-25 there were 4.90 million leasehold dwellings in England (20% of the housing stock), 3.38 million of them flats, and around 246,000 owner-occupied households were living with a lease of under 80 years, according to MHCLG’s Leasehold dwellings 2024 to 2025 release (21 May 2026). Short leases reduce value and make flats harder to sell or remortgage, and a share of freehold gives you the power to fix that yourselves.
It is not automatically better, though. A share of freehold in a building where the owners do not get on, or where the company has been struck off, can be more trouble than a well-managed leasehold block with a responsible freeholder. That is why a pre-purchase inspection of the building fabric matters just as much as the paperwork: as a co-freeholder you will be paying your share of every structural repair. A Level 3 building survey of the flat and common parts tells you what is coming before you commit.
Yes. The building still needs insuring, cleaning, maintaining and, eventually, re-roofing. The difference is that the money goes into an account controlled by the owners rather than to a third-party landlord who may add management fees and insurance commissions. Many share-of-freehold buildings run a simple annual budget and reserve fund; larger ones use a managing agent whose fee is itself a service charge item.
Owning a share of the freehold does not extend your lease by itself. Buyers are sometimes surprised to find a share-of-freehold flat with only 70 years left on the lease, because the previous owners bought the freehold and never got round to granting themselves new leases. Lenders assess the unexpired lease term, so a short lease still causes mortgage problems even with a freehold share.
The good news is that extending is usually simple and cheap. Because you and your neighbours are the freeholder, you can agree to grant each flat a new 999-year lease at a peppercorn ground rent, with each owner paying only legal and HM Land Registry costs. The main requirement is unanimity: every freehold owner (or the company acting through its directors) must sign. Where one owner refuses, or has died or disappeared, a leaseholder can still use the statutory route under the Leasehold Reform, Housing and Urban Development Act 1993, which adds 90 years at a peppercorn rent for a premium. Our guides on how to extend a lease and extending leasehold costs walk through both routes, and the free leasehold calculator gives an instant statutory premium estimate.
Most share-of-freehold buildings came about through collective enfranchisement: the statutory right for leaseholders of flats to join together and buy the freehold of their building, set out in Part I of the Leasehold Reform, Housing and Urban Development Act 1993. The freeholder cannot refuse a valid claim; the only argument is the price, which is calculated by a formula in the Act.
| Stage | What happens | Statutory timing |
|---|---|---|
| 1. Valuation and participation agreement | An accredited valuer prices the freehold; participants sign an agreement on shares and funding and set up a nominee purchaser (usually a company). | Before any notice is served |
| 2. Section 13 initial notice | Served on the freeholder through the nominee purchaser, stating the proposed price. | Starts the statutory clock |
| 3. Counter-notice | Freeholder admits or disputes the claim and states a counter-price. | By the date in the notice, at least 2 months later |
| 4. Negotiation | The two surveyors negotiate the premium. | Up to 6 months after the counter-notice |
| 5. First-tier Tribunal (if needed) | Either side applies for the Tribunal to determine the price. | Between 2 and 6 months after the counter-notice |
| 6. Completion | Freehold transferred to the nominee purchaser; new 999-year leases usually granted at the same time. | Typically several months to a year or more overall |
The price is built up flat by flat from the capitalised ground rents, the value of each reversion and, for leases under 80 years under the current regime, a share of marriage value, plus any hope value for non-participating flats and development value (for example an unconverted loft). LEASE’s guide to buying a share of the freehold for your flat explains each step, and our how do I buy the freehold of my flat article covers the practicalities. Alternatively, if the freeholder decides to sell, leaseholders of flats usually have a statutory right of first refusal to buy it first.
This is the fastest-moving part of leasehold law, and the position in September 2026 is as follows, drawing on the House of Commons Library briefing Leasehold reform in England and Wales: what’s happening and when? (published 5 August 2026, updated 10 September 2026):
For share-of-freehold owners the practical implications are: existing arrangements are unaffected; a conversion route from share of freehold to commonhold is expected (the Committee recommended that commonhold should become the default outcome of a collective enfranchisement); and if you are considering buying your freehold with leases under 80 years, you face a genuine timing decision between paying marriage value now or waiting for rules that may not commence until 2027 or later. An accredited valuer can model both scenarios for your building. See our explainer on leasehold marriage value for the numbers behind that decision.
| Feature | Standard leasehold | Share of freehold | Commonhold |
|---|---|---|---|
| Who owns the building? | Third-party freeholder | The flat owners jointly (or via their company) | Commonhold association owned by unit holders |
| Do you have a lease? | Yes, wasting asset | Yes, usually extended to 999 years | No, freehold unit in perpetuity |
| Ground rent | Often payable (cap proposed) | Peppercorn in practice | None |
| Control of management | Freeholder or their agent | The owners | The owners through the association |
| Lease extension cost | Statutory premium plus fees | Usually legal fees only | Not required |
| Availability in 2026 | Widespread | Common in converted houses and small blocks | Rare; new legal framework awaited |
Three moments call for a suitably qualified, accredited surveyor. First, before you buy a share-of-freehold flat: a building survey of the flat and common parts, because you will be co-funding every repair. Second, when leaseholders decide to buy the freehold: a valuation that sets a defensible Section 13 figure and a negotiator who can argue relativity, deferment rates and development value with the freeholder’s surveyor, and give expert evidence if the matter reaches the First-tier Tribunal. Third, once you own the freehold: a reinstatement cost assessment so the building is insured correctly, and a periodic condition survey so the reserve fund matches reality.
Ready to buy your freehold, extend a lease in a share-of-freehold building, or check a flat before you commit? Get a fixed-fee collective enfranchisement valuation quote or contact the Survey Merchant team today.
This article is general information, not legal or valuation advice for your specific building. Always take advice from a suitably qualified, accredited surveyor and a solicitor before serving notices or agreeing terms.
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