Two Flats, a Roof With Planning Permission, and Hope Value
Oxford Avenue, Raynes Park SW20. An Edwardian conversion where the landlord claimed compensation for the development potential of the roof — and had the planning permission to back it up.
At a glance
- Service
- Collective enfranchisement
- Location
- Oxford Avenue, Raynes Park, London Borough of Merton, SW20
- Property
- Edwardian conversion of two flats
- Acting for
- Both leaseholders
- Complication
- Planning permission was already in place on the roof, and the landlord claimed hope value for the development potential lost with the freehold
- Outcome
- Freehold acquired for a premium of approximately £25,000, followed by new 999-year leases to both flats
In a two-flat building, both of you have to agree
Collective enfranchisement requires at least half the flats to participate. In a building of two, that means both — there is no majority to be had otherwise.
It makes these claims unusually dependent on the relationship between neighbours. One leaseholder who will not engage, cannot fund their share, or is about to sell, stops the claim entirely. A great many two-flat conversions never buy their freehold for no better reason than that.
Here both leaseholders were committed, which turned the question from whether the claim could run to what it would cost.
The roof, and why the landlord wanted paying for it
Planning permission was already in place at the time of the claim, and the landlord claimed hope value in respect of the roof space and the roof.
Hope value is compensation for the prospect of future development — the value of what the landlord might have done with the building had they kept it. It is a legitimate head of claim and it is frequently misunderstood by leaseholders, who tend to read it as opportunism.
An existing planning permission changes the argument considerably. Where a landlord is asserting that a loft could one day be developed, the claim is speculative and can be met with evidence about the practical and legal obstacles. Where consent has actually been granted, the prospect is no longer hypothetical and the value attaching to it is real. It has to be met with valuation evidence rather than indignation.
The premium settled at around £25,000.
The practical point. Check the planning register before you serve a notice. A live consent on the roof or in the grounds will be reflected in what your landlord asks for, and it is far better to know at the outset than when the counter-notice lands.
Finishing the job
Buying the freehold did not lengthen either lease. Once the transfer was registered, both flats took new 999-year leases — the step that actually delivers what most leaseholders wanted when they started.
It is worth doing promptly. Granting the new leases soon after the purchase also limits chargeable gains accruing where the freehold is held through a company, though that is a point to take tax advice on separately.
When this applies to you
If you are one of two flats
Start with the conversation upstairs or downstairs, because nothing else matters until both of you are in. Then find out what is on the planning register, and get a valuation before anybody serves anything.
A two-flat claim is the smallest kind of enfranchisement and often the most personal. It is also the one where the freehold makes the biggest practical difference, because afterwards there is nobody to ask for consent but each other.
Common questions
Can one leaseholder buy the freehold of a two-flat house alone?
Not by collective enfranchisement. At least half the flats must take part, so in a building of two both leaseholders have to participate. An individual can still extend their own lease.
What is hope value?
Compensation to the landlord for the prospect of future development they lose along with the freehold. Where planning permission already exists, as here, that prospect is concrete and the value attaching to it is correspondingly higher.
Does buying the freehold extend our leases?
No. The leases continue exactly as before. New long leases are granted afterwards as a separate step — here 999 years to each flat once the transfer was registered.
What did it cost?
The premium was approximately £25,000, reflecting the hope value attaching to the roof. Legal fees on a claim of up to three flats start from £1,500 plus VAT per participating flat.
Speak to us
Thinking about buying your freehold?
We are a few minutes from Raynes Park station and act on claims like this one across Merton and well beyond it.
Client names are not used in our case studies. Properties are identified by road, block and postcode only. Every matter turns on its own facts, and outcomes described here are not a prediction of what will happen in yours.