What is share of freehold?

Share of freehold is not a separate form of ownership. It is a leasehold flat plus a stake in the company or the title that owns the building's freehold.

You keep your lease. You still have a landlord. The difference is that the landlord is you and your neighbours, acting together, rather than a third party with a commercial interest in the building.

That distinction matters because people routinely describe share of freehold as though the lease disappears. It does not. Your flat is still held on a lease, the lease still has a term, and it can still run down if nobody extends it. What changes is who grants the extension and on what terms.

It is also not the same as a freehold flat. A genuine freehold flat, with no lease at all, is rare in England and Wales and most lenders will not touch it, because there is no mechanism to enforce obligations between flats.

The two structures

Share of freehold is held one of two ways, and which one you have changes how the building is run day to day.

A management company. A limited company owns the freehold and each flat owner holds a share in it. Flat owners are shareholders and usually directors. This is the common structure and the better one. Shares transfer with the flat on sale, there is no limit on the number of owners, and the company has its own legal identity separate from the individuals.

The trade off is administration. The company files accounts and a confirmation statement at Companies House, and somebody has to do it.

Joint names on the title. The freehold is held directly by the flat owners as trustees. Land Registry rules cap this at four names, so it only works in small conversions.

It is simpler to set up and worse to live with. Every sale means transferring the legal title, which needs the cooperation of the other owners, and if one becomes uncontactable or dies the whole thing stalls.

If you are buying into a building with the joint names structure, factor in the cost and delay of that at resale.

Share of freehold, leasehold and commonhold compared

Three tenures get discussed together and they are genuinely different things.

Standard leasehold. You own a lease for a term. A third party owns the freehold, sets the service charge, appoints the managing agent, charges ground rent where the lease provides for it, and charges you to extend the lease. Your leverage is the tribunal.

Share of freehold. You own a lease and a share of the freeholder. Ground rent becomes circular and is normally set to nothing. Lease extensions cost legal fees rather than a premium, and 999 year extensions are routine. Service charges reflect actual cost rather than a margin. You carry the work.

Commonhold. No lease at all. You own your flat outright and are automatically a member of a commonhold association that owns the common parts. It was introduced in 2002 and has barely been used, with only around twenty developments recorded.

The government's stated intention is to make commonhold the default for new flats and to ban leasehold for most of them. That is proposed, not law. Until it is, share of freehold is the closest thing available to owning your flat outright.

How to get share of freehold

Three routes, in ascending order of difficulty.

Buy it by agreement. The freeholder is willing to sell and you negotiate. Fastest and cheapest where it is available, with no statutory procedure and no qualifying criteria. It depends entirely on the freeholder wanting to sell.

Collective enfranchisement. The statutory right to force the sale. At least half the flat owners in the building have to participate, the building has to meet qualifying conditions, and you pay a premium set by a statutory valuation. It is the route when the freeholder will not deal, and it is a formal legal process with notices, deadlines and valuation disputes.

The 2024 Act removed the requirement to have owned your flat for two years before claiming, so you can act immediately after purchase.

Right to manage. Not ownership at all. You take over the management functions of the building through an RTM company without buying anything. No premium, no valuation, and the freeholder cannot refuse if you qualify.

RTM gets you control of the service charge, the managing agent and the maintenance. It does not get you the ground rent, the lease extensions or the development value. For a lot of buildings that is the entire point, and it costs a fraction of enfranchisement.

Right to manage in more detail

RTM is the pragmatic option and the 2024 Act made it materially easier.

You form an RTM company, invite every qualifying leaseholder to participate through a formal notice, and then serve a claim notice on the freeholder. Management transfers on a set date unless the freeholder successfully disputes your eligibility.

To qualify, the building must be at least two thirds let on long leases, and at least half the flat owners must be members of the RTM company. The freeholder cannot refuse on the merits. The only grounds are technical.

Two changes are already in force:

• Mixed use buildings now qualify where non-residential floorspace is up to half the building. The old limit was a quarter, which excluded a great many buildings with shops beneath flats.
• Leaseholders bringing an RTM claim no longer have to pay the freeholder's legal costs. That removed the single biggest deterrent, since a freeholder could previously run up costs the claimants had to fund.

Getting the notices wrong is the main failure mode. The procedure is prescriptive and a defective notice can end the claim.

What the 2024 Act changed, and what is still only proposed

Most coverage runs these together. They are different things.

Already in force under the Leasehold and Freehold Reform Act 2024:

• The two year ownership rule is abolished. You can extend your lease or buy the freehold immediately after purchase.
• Right to manage extends to mixed use buildings with up to half non-residential floorspace.
• RTM claimants no longer pay the freeholder's legal costs.

Passed but not yet commenced: the longer 990 year standard lease extension term and several valuation changes are in the Act but await secondary legislation.

Proposed only, not law:

• A cap on ground rents in existing leases at 250 pounds a year, falling to a peppercorn after 40 years. The government's current target is late 2028, subject to parliamentary approval.
• Banning leasehold for most new flats and making commonhold the default tenure.
• Abolishing forfeiture and replacing it with a debt recovery regime.

The draft Commonhold and Leasehold Reform Bill was published on 27 January 2026 for pre-legislative scrutiny. The Housing, Communities and Local Government Committee reported on it on 27 May 2026, and the Bill is expected in the 2026 to 2027 parliamentary session.

If you are reading guidance that treats the ground rent cap or the commonhold default as current law, it is describing a proposal.

What you take on

Share of freehold transfers the landlord's obligations to you and your neighbours. All of them.

• The building fabric. Roof, structure, common parts. When the roof fails, it is your decision, your contractor and your share of the bill.
• Buildings insurance. Placing it, renewing it, and making sure the sum insured is right.
• Service charge administration. Budget, collection, accounts, and chasing whoever does not pay.
• Company filings, if you use the company structure.
• Health and safety compliance, including fire risk assessment of the common parts.

The problem is rarely cost. It is deadlock. A building with four owners where one will not agree to a roof repair, or cannot afford their share, has no landlord to force the issue. Standard leasehold at least has somebody whose job it is to act.

Many share of freehold buildings appoint a managing agent to handle the administration while keeping the decisions. That is usually the right answer above about six flats.

Mortgages and selling

Share of freehold is well understood by lenders and mainstream mortgages are widely available. Three things cause problems.

Mislabelling. Properties marketed as freehold flats when they are leasehold with a share of freehold. Tell your lender it is leasehold with a share of the freehold, because a genuine freehold flat is a different and much harder proposition.

Missing legal structure. Lenders want to see a functioning management company and a lease with enforceable covenants. A building with no formal arrangements between owners is a problem.

Short leases. The lease length still matters even though you control the extension. A buyer's lender assesses the lease as it is on completion, not as it could be. If it is short, extend it before marketing rather than promising to.

On resale, share of freehold is generally a positive. The buyer inherits control, no ground rent and cheap extensions. The due diligence is heavier, so expect questions about accounts, insurance and any planned major works.

If you let the flat out

Owning part of the freehold does not remove the letting restrictions in your lease. It changes who enforces them.

Most residential leases contain clauses restricting subletting, business use, or both. Short term letting frequently falls foul of them whatever the planning position is. Owning a share of the freehold does not exempt your flat, because the lease is a contract between you and the freehold company, and you are one member of it rather than the whole of it.

In practice the freehold company or RTM company decides policy. Some buildings permit short letting, some prohibit it outright, and some allow it with conditions. If you are buying with letting in mind, read the lease and ask what the company has actually agreed, because a permissive freeholder is not the same as a permissive lease.

Enforcement by a freehold company is faster and cheaper than enforcement by a council, so the lease usually matters more than the planning rules. Our guide to holiday let planning permission covers the planning side, which applies on top rather than instead.

If you let on a long term basis, the possession and rent rules changed substantially in 2026. Our guide to the Renters' Rights Act covers what applies now.

This is general information, not legal advice. Leasehold and enfranchisement are technical areas and the answer turns on your specific lease, so take advice before acting.