Dear Dawn

My Docklands apartment is reaching 80 years left on its lease, which I have been advised, presents mortgage problems for future buyers.

In response the management company is offering leaseholders a new 99-year lease extension (for about £10,000) or the freehold (for about £20,000).

Is there any material benefit to owning the freehold to an apartment?


Dear leaseholder,

Well, 80 years is uncomfortably low for a lease and definitely at this stage you would be wanting to do something as you will encounter all sorts of issues

These will affect you if you are selling or from a mortgage perspective and, naturally, this will be a concern not just to you as the owner but also to any future buyers.

If, as you mentioned, there is an opportunity to buy a share of the freehold then this is usually advantageous if you intend to keep the property for some time, but on the other hand if you plan on selling sometime soon then I’d opt for the cheaper option as it won’t make that much difference to a buyer.

If you plan on keeping the place for a while, however, the share of freehold is an attractive proposal as it will mean you have some control over how the estate is run and there will be no ground rent to pay.

Legislation has made it easier for leaseholders to take control and buy their freehold; effectively you are ridding yourself of the freeholder.

This can be done by executing a legal process called collective enfranchisement, which gives you the right to get together with other leaseholders to buy the freehold for a fair market price.

It’s important to realise a flat with a share of the freehold differs from a freehold house.

Apartment owners with a share of the freehold own the freehold jointly with the building’s other freeholders.

Owners with a share of freehold still have a lease; so they could still need to extend, usually for 999 years (though it should be free).

Dawn Sandoval is the owner of Dawn Sandoval Residential in Canary Wharf

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