Buying a block is not buying twenty flats. One statutory notice decides whether the sale is even lawful: where a building has two or more flats held by qualifying tenants and they hold more than half of them, the freeholder must offer it to those tenants first. Selling without serving a section 5 notice is a criminal offence — and the tenants can compel you, as purchaser, to sell it on to them at the price you paid.
Before anything else. If more than half the flats are held by qualifying tenants and the non-residential part is under half the floor area, a section 5 notice is compulsory. Sales collapse on this, and a purchaser who completes without one can be forced to transfer the building to the tenants at the price paid.
An unbroken block let on tenancies, a block part-sold to leaseholders, and a block with a residents’ management company are three different assets with three different valuations. The particulars usually say “block of flats” for all three. We get the schedule.
Height, storey count, registration status with the Building Safety Regulator, and whether leases qualify under the Building Safety Act. On anything at or above 11 metres this is the difference between a priced risk and an unquantified one.
Our fee is paid by the vendor. No acquisition fee and no retainer — and no reason for us to push a block whose rent roll does not stand up.
Unit count, region, lot size, target yield, whether you will take sitting leaseholders, and whether you need vacant possession. Blocks are bought on structure as much as on income, so the constraints matter more than the budget.
Right of first refusal status, tenure schedule, ground rents and service charge accounts, building safety position, EPC ratings across the units, and the SDLT treatment — before you instruct solicitors.
Remediation exposure, the cost of reaching EPC C across every unit by October 2030, service charge deficits, major works falling due, and what the Renters’ Rights Act does to a rent roll built on fixed terms.
Under Part I of the Landlord and Tenant Act 1987, a landlord intending to dispose of a freehold interest must first offer it to the leaseholders. It bites where the premises contain two or more flats held by qualifying tenants, those tenants hold more than 50% of the flats in the building, and the non-residential part does not exceed 50% of the total internal floor area. A qualifying tenant is broadly a long leaseholder, excluding business tenancies and excluding anyone who holds three or more flats in the building.
Where it applies, the landlord serves a section 5 notice giving the tenants a period of not less than two months to accept, during which contracts cannot be exchanged. The mechanics are unforgiving and the notice must be right.
Multiple Dwellings Relief was abolished on 1 June 2024, with transitional protection only for contracts exchanged before 6 March 2024. Nothing replaced it. Any acquisition model still carrying an MDR line is overstating the return, and a surprising amount of circulating material has not been updated.
What survives is the rule that where six or more dwellings are acquired in a single transaction, the purchase is treated as non-residential and the non-residential SDLT rates apply — topping out at 5% rather than the residential rates with their additional dwelling and higher-rate surcharges. On a block of any size that is usually the more favourable route, and it is why unit count and transaction structure are worth deciding before heads of terms rather than after.
The Warm Homes Plan, published on 21 January 2026, confirmed that privately rented homes in England and Wales must reach EPC C by 1 October 2030. The earlier proposal for a phased deadline — 2028 for new tenancies — was dropped in favour of a single date. A cost cap of £10,000 per property applies, with government estimating average costs nearer £5,400, and spend from 1 October 2025 counts toward it.
Three exemption routes exist: a ten-year exemption where the standard is still not met after qualifying spend of £10,000; a property value adjustment capping required spend at 10% of value for properties under £100,000; and exemptions covering certain solid wall insulation and fabric damage cases.
Buildings at least 18 metres tall or with at least seven storeys, containing two or more residential units, are higher-risk buildings. They must be registered with the Building Safety Regulator, they require an accountable person and a safety case, and they are subject to the gateway regime for building work. Occupation of an unregistered higher-risk building is an offence.
Below that, the Building Safety Act 2022 protections still matter at 11 metres or five storeys. Leases that were qualifying leases on 14 February 2022 carry statutory protection from remediation costs, and that status attaches to the lease rather than to the leaseholder — it passes to a buyer. For a block investor the practical question is what proportion of the leases qualify, because unprotected costs land on the freeholder or on non-qualifying leaseholders.
On an unbroken block let on tenancies, the income model changed on 1 May 2026. Section 21 is abolished and all assured tenancies are periodic, so there are no fixed terms to underwrite against. Rental bidding is banned — you cannot accept more than the advertised rent — and rent in advance is capped at one month. Rent may be increased once a year on two months’ notice, and the tenant may challenge it at tribunal.
Enforcement changed at the same time. Rent repayment orders now run to 24 months, civil penalties reach £40,000, and the reversal of Rakusen v Jepsen means a superior landlord can be liable where an intermediate landlord is at fault. If a block is held through a rent-to-rent or management structure, that is a live exposure for the freeholder, not a problem confined to the operator.
Under Part I of the Landlord and Tenant Act 1987, a freeholder intending to sell must first offer the building to the leaseholders where two or more flats are held by qualifying tenants, those tenants hold more than half the flats, and the non-residential part is not more than half the internal floor area. Serving the section 5 notice is compulsory and failing to do so is a criminal offence with an unlimited fine. The part that matters to a buyer is the remedy: qualifying tenants can pursue the purchaser and require the building to be transferred to them at the price paid. It is the first thing to establish on any block, before valuation.
Multiple Dwellings Relief was abolished on 1 June 2024 and nothing replaced it, so any model still carrying an MDR line is wrong. What remains is the rule that where six or more dwellings are bought in a single transaction, the acquisition is treated as non-residential and taxed at the non-residential rates, which top out at 5% rather than attracting the residential surcharges. On most blocks that is the better outcome, but it depends on how the transaction is structured, so it is worth settling before heads of terms rather than discovering it at completion.
More than most vendors’ figures show, because it applies per unit rather than per building. The Warm Homes Plan confirmed on 21 January 2026 that privately rented homes must reach EPC C by 1 October 2030, with a £10,000 per property cost cap and government estimating an average nearer £5,400. Across twenty flats that is a six-figure capital call with a fixed deadline. There are exemption routes, including a ten-year exemption once £10,000 has been spent without reaching the standard. Note also that the EPC methodology changes from October 2026, so current ratings are not a reliable guide to future ones.
Yes. Buildings at 18 metres or seven storeys with two or more residential units are higher-risk buildings requiring registration with the Building Safety Regulator, an accountable person and a safety case. But the leaseholder protections apply from 11 metres or five storeys, and they attach to leases that were qualifying leases on 14 February 2022. That status passes with the lease to a new owner. For a block investor the number that matters is what proportion of the leases qualify, because remediation costs that cannot be recovered from protected leaseholders land somewhere else — usually on the freeholder.
Substantially, since 1 May 2026. All assured tenancies are periodic and section 21 is abolished, so there are no fixed terms to underwrite. Rental bidding is banned, so you cannot accept above the advertised rent. Rent in advance is capped at one month. Rent rises are annual, on two months’ notice, and challengeable at tribunal. Enforcement is much heavier — rent repayment orders of up to 24 months and civil penalties to £40,000 — and the reversal of Rakusen v Jepsen means a superior landlord can be liable for an intermediate landlord’s failures. If the block runs through a rent-to-rent structure, that exposure reaches the freeholder.
