Buying your freehold involves three main costs: the freehold premium, professional fees, and potentially stamp duty. The total can range from under £5,000 to well over £50,000 depending on property value, ground rent, and lease length.
✓ Updated✓ 9 min read
Key Points
The freehold premium (the price you pay the freeholder) is calculated by a statutory formula — not freely negotiated
Typical premium for a house: £2,000–£30,000+ depending on ground rent, lease length, and property value
Legal fees: £1,500–£5,000 (yours) plus you often pay the freeholder's reasonable legal fees too
Surveyor/valuer: £500–£2,000 — essential to avoid overpaying the premium
Stamp Duty Land Tax may apply on the freehold premium
Cost Summary: At a Glance
Cost Item
Typical Range
Who Pays?
Required?
Freehold premium
£2,000–£30,000+
Buyer (you)
Yes
Your solicitor's fees
£1,500–£5,000
Buyer (you)
Yes
Your valuation surveyor
£500–£2,000
Buyer (you)
Strongly recommended
Freeholder's legal fees
£500–£3,000
Buyer (you)
Yes (if statutory route)
Stamp Duty Land Tax
0–5%+ of premium
Buyer (you)
If premium exceeds £250k
Land Registry registration
£45–£540
Buyer (you)
Yes
The Freehold Premium: How Is It Calculated?
The freehold premium (the price paid to the freeholder) is not freely negotiated — it's calculated using a statutory formula that considers three main factors:
📅
Years Remaining on Lease
The shorter the lease, the higher the premium. A lease with 70 years costs significantly more to buy than one with 150 years.
💷
Ground Rent
The freeholder loses future ground rent income. The capitalised value of this stream is a key component of the premium calculation.
🏠
Property Value
The "marriage value" — the uplift in value the leaseholder gains by owning the freehold — is shared with the freeholder when the lease has under 80 years remaining.
⚠️ The 80-Year Rule (Marriage Value)
When a lease has fewer than 80 years remaining, "marriage value" applies. This is the additional value created by merging the freehold and leasehold — and 50% of it must be paid to the freeholder. This can significantly increase the premium cost. Act before you fall below 80 years if possible.
Example Premium Estimates for Houses
Property Value
Ground Rent
Lease Remaining
Indicative Premium
£250,000
£50/yr
150 years
~£1,000–£2,500
£250,000
£100/yr
90 years
~£3,000–£6,000
£350,000
£200/yr
75 years (marriage value applies)
~£12,000–£20,000
£400,000
£500/yr doubling
65 years (marriage value applies)
~£25,000–£45,000
£600,000 (London)
£250/yr
80 years
~£10,000–£20,000
These are indicative estimates only. Always commission a professional valuation — the actual premium depends on the precise statutory calculation.
Legal Fees in Detail
You'll pay two sets of legal fees: your own solicitor's fees and (if using the statutory route) a contribution to the freeholder's reasonable legal costs.
Your Solicitor (£1,500–£5,000)
Eligibility assessment and advice
Drafting and serving the Initial Notice
Negotiating with freeholder's solicitor
Drafting the transfer deed
Land Registry registration
More complex = higher fees (flats cost more than houses)
Freeholder's Legal Costs (£500–£3,000)
Under the statutory route, you pay the freeholder's reasonable costs
These are capped at what is objectively reasonable — disputes can be referred to the FTT
Informal/voluntary route: you don't automatically pay these
Typically £500–£1,500 for straightforward cases
Do I Pay Stamp Duty on the Freehold Premium?
Stamp Duty Land Tax (SDLT) may apply to the freehold premium, but in practice it rarely does for houses because:
For houses, the freehold premium is usually well below £250,000 (the standard SDLT nil-rate band), so no SDLT is payable
For flats (collective enfranchisement), the threshold that applies depends on whether you own other properties. If you do, the 3% surcharge applies to the entire premium from £1
If ground rent is over £250/year, SDLT on the rent element may also apply — your solicitor will calculate this
✓ Good News for Most House Buyers
If your freehold premium is under £250,000 and you're buying a house (not a flat), no SDLT is payable. Always confirm with your solicitor given the specific details of your transaction.
Total Cost Example: House with 85-Year Lease
Scenario: £280,000 house, £100/yr ground rent, 85 years remaining
In most cases, yes. The freehold purchase cost is typically recovered in the enhanced resale value, removal of ongoing ground rent, and reduced conveyancing complexity when you sell. RICS research suggests freehold properties sell for 1–3% more than equivalent leaseholds.
Can I negotiate the freehold premium down?
Through the statutory route, the premium is set by formula — you can't negotiate it down arbitrarily. However, getting an independent valuation gives you the strongest negotiating position. If the freeholder's counter-offer is too high, the FTT can determine the correct price. In the informal route, there's more room to negotiate but less legal protection.
Can I get a mortgage to cover the freehold cost?
Most high-street lenders won't offer a specific mortgage for freehold purchase. Some leaseholders remortgage their property and use the released equity to fund the purchase. Alternatively, specialist lenders occasionally offer short-term bridging finance. Your solicitor will advise on the most appropriate funding route.