New figures show freehold purchase is on a roll

Andrew Lyndon-Skeggs, founder and managing director of ELS, the market leader in collective enfranchisement said: “We have had a steady increase in demand for enfranchisements over the past five years and are currently arranging collective enfranchisement for over 2000 flats. Unfortunately there are no statistics for the total number of enfranchisements that have taken place over the past 5 years so we have no hard evidence to determine the level of changes to the system of leasehold ownership. The current level of enfranchisement activities is, however, a record for ELS. ELS was set up in 2002 in anticipation that the legislation would lead to a considerable acceleration in the demand for collective enfranchisement.”

The Leasehold Advisory Service (LEASE) believes that there may be 2 - 2½ million leasehold flats in England and Wales of which 1.5 to 2 million are thought to be in the private sector.

The Association of Residential Managing Agents reports that around two-thirds of all blocks managed by their members are lessee controlled ie. 18-20,000 blocks equating to approximately 432,000 to 480,000 flats, but there are no details on how many have been enfranchised. Companies House has nearly 60,000 Resident Management Companies on register.

LEASE also report that since commencement of the 1993 legislation there have been 765 cases of collective enfranchisement determined at the Leasehold Valuation Tribunal, relating to a total of around 7,500 flats. However, there is no record anywhere of 1993 Act cases which have settled without going to the LVT or acquisitions by private negotiation outside the Act. LEASE think that cases determined at the LVT might represent around 10% of all acquisitions but they say that this is just educated conjecture.

Lyndon-Skeggs continued: “Extrapolating from these figures it could be that around 100-200,000 flats have been enfranchised, leaving a huge number yet to gain share of freehold. If this is the case, those working in this field have an immense task ahead of them because the ambition of most lessees is to gain control of the management of their property and enhance its value both of which are achieved by acquiring the freehold.”