Mortgages for freehold blocks of flats are available up to 80% loan-to-value. Fox Davidson works with specialist buy-to-let mortgage lenders that will lend on an entire freehold block of flats held under one freehold title.

Fox Davidson can also arrange funding for property developers retaining blocks of flats and creating long leasehold titles for each flat. Using one or more lenders across a block of leasehold flats, we can mortgage all of the leasehold flats within a block with common ownership of the freehold.

Multi-Unit Freehold Block (MUFB) Lending Criteria

  • Up to 80% loan-to-value
  • Minimum loan £150,000 and up to £10m (larger loans by exception)
  • Privately rented (AST) or corporate letting agreements
  • HMO tenancies are acceptable within the block
  • Complex ownership structures including offshore company structures
  • New build 
  • Personal name and ltd company ownership
  • No minimum income

Mortgages For Developers Retaining Newly Built Blocks Of Flats

Fox Davidson secure lending for often complex ownership structures, with the freehold and leasehold owning companies under common ownership as subsidiary companies. A common method of retaining flats includes the freeholder becoming the leaseholder and a new SPV management company taking ownership of the freehold title. 

With advice from your solicitor and accountant, it is possible to purchase the leasehold flats and not pay stamp duty or capital gains, as the ownership remains within the group of companies. You should take advice from your accountant/solicitor in that regard.

What Is A Multi-Unit Freehold Block?

A multi-unit freehold block (or MUFB) is a block of flats all held under one freehold title at the land registry.

Each unit will be self-contained, have its own utilities and separate flat number.

How Many Flats Will A Lender Mortgage In A Block Of Flats?

Mortgage lenders typically have exposure limits of lending on 20% to 40% of the leasehold flats within a block. Fox Davidson do work with a couple of lenders that will lend on 100% of the leasehold flats in a block, subject to a maximum number of flats depending on the lender.

How Many Flats Can Be Mortgaged Under One Freehold Title?

There is no limit to the number of flats that can be mortgaged under a freehold title. However, some of the more mainstream lenders have a maximum of 10 flats.

What Is The Minimum Size For A Flat To Be Mortgageable?

The minimum size of a flat for mortgage purposes is 30 square metres. This includes studio flats. When mortgaging a freehold block of flats, we can agree funding where one of the flats is just below this size as an exception.

Mortgaging Leasehold Flats Where The Owner Is Also The Freeholder

When mortgaging a leasehold flat, the freehold needs to be owned in different names. This could be as simple as owning the freehold in joint personal names, and mortgaging the leasehold flat in a single personal name.

The same applies for LTD companies, as the freehold company will need to be different to the leasehold company. The directors can be the same and the ownership structure can be set up so that the freehold/leasehold company is a subsidiary of the other.

Fox Davidson Mortgage Brokers

For more information on leasehold flats or to speak to us about general mortgage advice, please contact a member of the Fox Davidson team today. Email or call us on 0117 989 7950.