© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
A year after we bought our freehold, I was somewhat stunned to hear a usually clued-up neighbour announce: "We can do what we like now we don't have a lease. " We do, of course, still have a lease. And we're not only bound by it as tenants. We've assumed all the landlord's responsibilities.
Enfranchisement isn't a happy ending, it's a new beginning. And it comes with ongoing costs that blocks don't always consider when they're raising money for the actual purchase. Yes, it's great that your home is no longer a wasting asset and has shot up in value. But if you're hoping for a hassle-free life with rock-bottom service charges, you may wake up one day with a post-purchase hangover.
These new obligations include maintaining the block under the terms of the lease and carrying out major works; the freehold company shoulders all the obligations of the landlord and can be taken to an LVT by any leaseholder if it ignores that fact. But, unlike some external landlords, it doesn't have a bottomless pocket. In the first years after enfranchisement, it may not even have an adequate sinking fund. Money for major works must be collected from leaseholders upfront - and you only need several "can't pay, won't pay" leaseholders to face endless, potentially expensive delays.
Taking those awkward leaseholders to court can be costly too, as well as demoralising. This is a particular problem for small blocks, where they may represent a relatively large proportion of the block's financial potential.
And apathy can also cost you. By law, the freehold company must have at least two directors. If, after the first flush of enthusiasm, nobody will volunteer, that starts a downward slide, which may even end in the company being struck off. The freehold then reverts to the Crown and you'll need to buy it all over again.
Hiring a good managing agent takes away the day-to-day hassle of running the block. But the financial buck still stops with the freehold company. Ironically, in a couple of instances recently, blocks have been so ground down by their responsibilities as landlords they've become desperate to sell their hard-won freehold.
This grim picture certainly isn't true for the vast majority of blocks, where enfranchisement does bring real benefits. But, before you take the plunge, it's worth recognising - being your own landlord isn't just about property values, it's an ongoing financial commitment.
Jane Barry Associate Editor