The length of your existing lease affects the value of your property and has an impact on the price you will pay to acquire the freehold or a lease extension. In general terms, the shorter the lease, the less valuable your leasehold. Very few banks will provide standard mortgages on flats with short leases because they provide inadequate security to a lender. This can limit your market should you wish to sell your flat and will tend to have a negative impact on the value of your flat. Acquiring the freehold deals with this issue because then you, the leaseholders acquiring the freehold (or your successors if you sell your flat), own the building in perpetuity.

Once the freehold of the building has been transferred to those leaseholders who participated in the acquisition, they are likely to wish to make several changes to their own leases as well as to the way the building is managed.

In many cases, a principal reason for acquiring the freehold is shortening leases, and therefore the participating leaseholders will wish to benefit from their perpetual ownership of the building by granting to themselves increased lease terms of 999 years. They will also rid themselves of any ground rent their leases required them to pay to the former freeholder, as well as any clauses in their leases that have caused them problems in the past.

In most cases, the participating leaseholders will gain control of the management of their building, and they may wish to choose their own managing agent to work on their behalf. If the former freeholder was profiting from the service charge and from the maintenance of the building, there is a clear opportunity for the leaseholders to now reduce the service charge and to focus on what the building really needs.

It is important to point out that while the leaseholders who participated in the acquisition of the freehold have the right to agree among themselves to amend their leases, those leaseholders who did not participate do not. For the non-participating leaseholders, nothing changes except the identity of their landlord.

In some cases, such as where the freeholder is friendly and helpful, or where the value of the freehold or of a lease extension is relatively low, it may be worthwhile having informal discussions with the freeholder, in which case the leaseholders do not instruct a solicitor and valuer to act on their behalf. The risk, however, is that those discussions may go on without leading to any satisfactory conclusion for months or years, and there is nothing that the leaseholders can do to force the freeholder to agree to a deal or to a fair price. This prolonged process is particularly risky and costly if the remaining terms on the leases are short.

The statutory route involves serving a statutory notice on the freeholder under the Leasehold Reform Housing & Urban Development Act 1993, which will initiate a formal process and timetable as defined by the Act. If a reasonable price for the freehold or for a lease extension can not be agreed with the freeholder, this route also gives the leaseholders access to the Leasehold Valuation Tribunal which will make a binding decision. Though the statutory route will involve more professional costs than would an informal discussion with the freeholder, it provides greater certainty that the process of acquiring the freehold or a lease extension will end with a positive result and that the price will be reasonable.