Flying Freehold Mortgages Explained

A flying freehold mortgage refers to a home loan on a property with a section that overhangs or underlies the freehold of a neighbouring property (i.e. a room over a shared passageway). Lenders tend to be a little more cautious when it comes to applications on this type of property.

In this article, we’ll discuss the potential problems you might face in obtaining a mortgage and how speaking to the right broker can see you bypass those issues and get approved.

Can you get a mortgage on a flying freehold property?

Yes. These types of properties potentially present some legal issues as, in theory, the owners of the neighbouring property may refuse access for repair work or fail to maintain their part of the building.

This concerns some lenders even though, in reality, problems rarely arise. This would only occur if one party is happy to put their own property at risk of structural problems.

The good news is that most lenders will accept mortgages on non-standard constructions such as flying freehold properties. Typically, these are dealt with on a case-by-case basis, depending on the property in question.

Some providers put a maximum limit on the total floor space taken up by the ‘flying’ element of the property (typically 10%, 20% or 25%). But plenty of lenders, including some mainstream ones, have no maximum.

On the flip side, however, a handful of lenders will not lend on a flying freehold property at all. An experienced broker can be most useful in identifying the right lenders who can help.

Things to consider before you apply

There’s no reason you shouldn’t buy a house with a flying freehold, but here are some key points to consider before applying for a mortgage.

Covenants

Some will want to examine the exact wording of the property’s title deeds to satisfy themselves that the flying freehold element has been documented correctly.

They may also want to check if appropriate covenants are in place that provide the necessary access rights if and when repair or maintenance works are needed. This typically includes a condition preventing your neighbour from carrying out any work that might impact the structural integrity of your property.

It’s worth noting that any such covenant is made between the two individuals, not the properties. This means you must agree or arrange a covenant with your neighbour-to-be before completion, as any existing covenant will be nullified once the sale goes through.

The Law Commission asked for the legislation regarding covenants to be assessed and updated in 2011, but this process has not yet yielded results.

The Neighbouring Land Act 1992

The Neighbouring Land Act 1992 gives property owners the right to access a neighbour’s property to repair their property. However, this would not protect you if your neighbours’ home needs to be repaired to prevent yours from suffering.

Indemnity insurance

Also, lenders usually require you to take out flying freehold indemnity insurance. This is essential for you and the lender as it covers you for legal expenses and repair costs should the flying freehold be found to have faults. It usually costs between £100 – £200 and is a one-off payment that covers the mortgage term.

If this all sounds confusing, don’t worry. Your broker will guide you through the process and ensure the transaction runs smoothly.

How a broker can help you get approved for a flying freehold mortgage

We work with expert brokers who arrange flying freehold mortgages daily. They have deep market knowledge, understand each UK lender’s attitude towards flying freehold properties, and can often access exclusive deals not available to direct applicants.

This means they will assess your circumstances and quickly identify your right lender. So, with an expert broker onside, there’s no need to worry about the added complexities of this type of borrowing.

If you get in touch, we’ll arrange for a flying freehold expert to contact you directly and discuss your requirements in more detail.

Which lenders offer mortgages for this type of property?

There are more than sixty mortgage providers in the UK that offer lending for flying freehold properties.

Mainstream lenders that offer this type of borrowing include:

• Halifax
• TSB
• Nationwide
• Natwest

Others will only accept applications via brokers.

These include:

• Santander
• Bank of Ireland
• Skipton Building Society
• Coventry Building Society

Some lenders only offer flying freehold mortgages on a ‘limited distribution’ basis. This means they have exclusive rates and deals to particular brokerages.

Remortgaging a flying freehold property

Remortgaging is usually easier as there will likely already be covenants in place, and you may have an existing relationship with your neighbour.

If the connecting property is sold at any point, you should contact the solicitor you used when buying your home to ensure new covenants are put in place.

When you remortgage, you will still be limited in terms of the number of lenders you can approach. It will pay to speak to a broker again, as they will be able to find you the best deal on a flying freehold mortgage according to your situation at the time.

Get matched with a broker who specialises in flying freehold mortgages

Flying freehold mortgages are complex from a legal perspective, but that shouldn’t put you off buying the home you want.

Our broker matching service will match you with a broker who is experienced in helping people like you secure the best deal on a flying freehold mortgage.

Call today on 0330 818 7026 or enquire online to get matched with an expert who will relieve you of the stress associated with complex mortgages.