Share of Freehold: What It Means and Is It Worth Pursuing?

Share of freehold is increasingly common in UK flat buildings. Understand what it means in practice, the significant advantages over standard leasehold, and how to acquire it.

What Does Share of Freehold Mean?

When a property is described as having a "share of freehold," the flat owner also holds a share in the company that owns the freehold of the whole building. Each flat owner holds a stake in a Residents' Management Company (RMC) that collectively owns the freehold — eliminating the adversarial freeholder and leaseholder relationship entirely.

How Share of Freehold Arises

• Original purchase: When a building is first converted to flats, the developer transfers the freehold to a company shared between flat buyers from the outset.
• Collective enfranchisement: Leaseholders exercise their statutory right to collectively purchase the freehold and share it between themselves.

The Key Advantages

• No ground rent: The RMC sets ground rent at zero
• Control over service charges: You appoint your own managing agent or self-manage
• Cheap lease extensions: Extend your own lease for as little as £500–£1,000 in legal fees since you negotiate with yourselves as freeholder
• Building insurance control: Choose your own policy at competitive rates
• Property value uplift: Properties with share of freehold typically command a 5–10% premium over equivalent standard leasehold

A flat with share of freehold and a 72-year lease can extend to 999 years for as little as £800 in legal fees — compared to £15,000–£35,000 or more for a statutory extension when dealing with a commercial freeholder.

Practical Challenges

All shareholders must agree on major decisions, which can be difficult when owners have different priorities. Non-resident investors may be less engaged with maintenance decisions. Disputes must be resolved internally or through the Tribunal. These challenges are manageable but should be understood before pursuing.

How to Acquire It

The route is collective enfranchisement — at least 50% of flat owners must participate. The process typically takes 9–18 months. Once the freehold is acquired, each participating leaseholder receives a share in the freehold company.