Expert Advice on 1967 Act Freehold Enfranchisement Valuations
Freehold enfranchisement under the Leasehold Reform Act 1967 allows qualifying leaseholders of houses to acquire the freehold interest from their landlord. Determining the premium payable is a specialist statutory valuation exercise, requiring expert knowledge of valuation methodology, statutory assumptions and tribunal practice.
This page explains the enfranchisement process and valuation methodology, and highlights why professional advice from an experienced enfranchisement valuation surveyor is essential.
What Is Freehold Enfranchisement Under the 1967 Act?
The 1967 Act provides qualifying long leaseholders of houses with the legal right to purchase the freehold. Where the price cannot be agreed, the premium is assessed in accordance with statutory valuation bases and case law, not simple market value.
The Enfranchisement Process
1. Eligibility review and initial valuation advice
2. Service of the tenant’s notice
3. Valuation date fixed at notice date
4. Landlord’s counter-notice
5. Negotiation between valuers
6. First-tier Tribunal determination if required
Valuation Bases Under the Leasehold Reform Act 1967
Section 9(1) – Original Valuation Basis
This applies to certain lower-value houses. The premium reflects:
• Capitalised ground rent
• Value of the landlord’s reversion
Marriage value is excluded.
Section 9(1A) – Special Valuation Basis
This is the most common basis and applies to higher value properties. The valuation includes:
• Capitalised ground rent
• Reversionary value
• Marriage value where the lease has less than 80 years unexpired
Marriage value is shared equally between landlord and tenant.
Key Valuation Methodology
Ground Rent Capitalisation
The valuer assesses the ground rent payable and applies an appropriate capitalisation rate reflecting market risk and evidence.
Reversionary Value
The freehold vacant possession value is assessed and discounted back to the valuation date using an appropriate deferment rate.
Marriage Value
Where applicable, the uplift in value created by combining the leasehold and freehold interests is calculated and apportioned.
Development and Hope Value
Potential development value may be included where attributable to the landlord’s interest, subject to statutory assumptions.
Statutory Assumptions and Disregards
The valuation must:
• Disregard tenant’s improvements
• Ignore enfranchisement rights
• Assume an open market sale subject to statutory assumptions
Tribunal Determination
If negotiations fail, the First-tier Tribunal (Property Chamber) determines the premium. Valuation evidence must be clear, reasoned and compliant with statutory principles.
Why Instruct a Specialist Enfranchisement Valuer/ RICS Registered Valuer
Freehold enfranchisement valuations are complex and highly sensitive to assumptions such as deferment rates, relativity and development value. Instructing an experienced RICS enfranchisement surveyor ensures statutory compliance, robust negotiation and defensible tribunal evidence.
Contact Us
If you require expert advice on freehold enfranchisement valuations under the Leasehold Reform Act 1967, contact our specialist RICS Registered and Chartered Surveyors today for clear, independent and professional guidance.
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