Why Enfranchisement ?
The Advantages of Collective Enfranchisement
Freehold acquisition by Collective Enfranchisement offers many advantages and is a sensible decision for almost all long leasehold tenants. The benefits include:
1. Your property will no longer be a wasting asset.
2. Your flat will immediately increase in value and this increase should be more (sometimes significantly more) than the cost of enfranchisement.
4. As a participant, you will cease to pay ground rent.
5. Following the acquisition of the freehold, the management will be fully under the control of the participant lessees.
6. With control of the management, it should be possible to reduce the running costs, particularly in so far as insurance and maintenance costs.
The Advantages of Lease Extensions
Lease extensions offer some of the advantages of Collective Enfranchisement. However, the cost of a 90 year lease extension will be close to the cost of Share of Freehold (with 999 year lease), whereas a lease extension does not increase value to the same extent as Collective Enfranchisement, and neither does it secure control of the property.
It is generally best therefore to consider lease extensions only in situations where Collective Enfranchisement is not possible, either because it would not be feasible to gather 50% of the lessees, or for some other reason.