© 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.
Long gone are the days when landlords resisted the very idea of enfranchisement and the Duke of Westminster took a complaint to the European Court of Human Rights. Some landlords still safeguard their freeholds by granting only short leases or ensuring the number of rented flats in a block prevents the long leaseholders from qualifying. But successive tranches of legislation have persuaded most that the sale of their freeholds is inevitable - major players like the Cadogan Estate are now diversifying into commercial property.
All the same, life is not getting any easier for leaseholders wanting their independence. It’s true that, thanks to the 2002 legislation, landlords can no longer fight purchase all the way through to the Lands Tribunal. As long as the leaseholders qualify and serve their notice correctly, the landlord must sell.
But for how much? Enfranchisement is a form of compulsory purchase and landlords are now focussing on getting the maximum compensation for the loss of their assets. The fighting ground has moved from the right to purchase to the valuation. Leaseholders are not helped by the fact that the 2002 Act requires them to declare a valuation upfront and that major landlords employ top-gun valuers.
Arbib v Cadogan demonstrates the latest battle tactic – linking the value of reversions not to a notional 6pc yield, but to the lower returns of the money market, resulting in higher prices payable by leaseholders. You may think – only in Chelsea. But what happens in Chelsea and Mayfair soon spreads to Croydon and Molesey. Leaseholders will also need to hire costly valuers if they’re to keep their end up during negotiations.
Enfranchisement has ceased to be something a group of willing leaseholders could organise themselves with the help of the local lawyer. Specialist professionals have become a must. And, given the other challenges that leaseholders face, from widespread subletting to freeholds, which, in parts of central London, can easily cost £1 million, it’s not surprising there’s a growth in specialist enfranchisement companies that will manage the entire process.
Everyone prays the government won’t implement the remaining regulations to the 2002 Act, which, in stipulating that a special Right to Enfranchise company must be set up and an invitation to participate served on every leaseholder, will erect more expensive hoops for leaseholders to jump through. But you never know.
The law has made enfranchisement a right. But it is also now a high-cost industry.