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Maisonette mortgages

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By Pete Mugleston   Mortgage Advisor

Last updated: 25th June 2019 *

What you need to know when buying a maisonette property

People contact us regularly with queries surrounding mortgages and maisonette properties. We’re often asked “can you get a mortgage on a maisonette?” and “what are the pros and cons of buying a maisonette?”

This article provides the answer to these queries, discusses other factors you should take into consideration and the questions you should ask when buying a maisonette.

We’ll also cover what else can impact mortgage eligibility on a maisonette.

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Can you get a mortgage on a maisonette?

Yes. There are lenders who offer residential and buy to let mortgages on this property type, and if you meet their eligibility requirements, there’s no reason why you can’t secure one.

We work with expert brokers who arrange maisonette mortgages every day, and know exactly which lenders offer the best rates on them. Make an enquiry to speak to one of them over the phone today, or read on for more information.

How does a maisonette mortgage differ from a standard mortgage?

It’s understandable why there is confusion around getting a mortgage on a maisonette, considering these type of homes are contained within larger buildings. Many people want to know what the implications are on their mortgage application.

Generally, it will all depend on whether the maisonette is freehold or leasehold. This is usually the most important factor for lenders with this type of property, and it can have a considerable impact on the mortgage offer.

But what is a maisonette property?

The term “maisonette” refers to a self-contained apartment within a larger building, which is usually spread out over two or more storeys. In this country, maisonettes tend to have their own separate entrance, which is how they are distinguished from flats.

Freehold maisonette mortgages

If you are buying the freehold of a maisonette, you own the property outright, including the land it’s built on. If you are a freeholder of the property, you will have the responsibility of maintaining the property and the land.

This means that you will need to budget for these costs, which will also be factored into your affordability assessment when you apply for a mortgage. However, it means that you don’t have to worry about paying ground rent, service charges or any other charges imposed by a freeholder.

Share of Freehold maisonette properties

In this day and age, especially in densely populated cities such as London, Birmingham or Manchester for example, you will find that a lot of maisonettes were once upon a time, one large single property.

Because of this “share of freehold” arrangements are more common on them. This is where the properties are still individual leasehold properties – see below – but when you buy them you also buy a share of the freehold with it. Not all providers will lend on this so it’s important to establish this as early in the process as possible.

Many buyers find this undesirable because all freeholders are jointly liable for the maintenance of the building. This requires you to be on good terms with your neighbours and able to amicably discuss money with them

Leasehold maisonette mortgages

Getting a leasehold maisonette mortgage is far more common. Nearly every flat and maisonette in London is leasehold, and it’s very common in the rest of the UK other than in Scotland.

If you have a maisonette on a leasehold basis, you own the property for a fixed period of time. You’ll have a lease with the landlord (or freeholder) which will stipulate how many years you’ll “own” the property. When the lease expires, ownership of the property will return to the freeholder.

The length of time remaining on the lease is a very important factor in finding out who will lend. If the property has 90 years remaining, then most providers will lend. If a property however has only 60 years remaining then far fewer will lend – those that will usually have higher rates. You can apply to have leaseholds extended and usually this would be a good idea as if you ever plan to sell the property you may struggle if it only has a short amount of time remaining on its leasehold.

Questions to ask when buying a maisonette as a leaseholder

Aspiring leaseholders on maisonette properties should consider the following...

What are the service charges?

While you aren’t responsible for general maintenance of the whole building as a leaseholder, you will have to contribute to the cost of the freeholder doing so in the form of a service charge.

You must budget for this before putting an offer on a maisonette. Lenders will also factor monthly service charges in when calculating your affordability. This charge covers the cost of things like communal garden maintenance and repair of exterior walls.

How much is ground rent?

Ground rent is a sum of money leaseholders pay the freeholder to occupy the land a leasehold property is build upon. Your landlord may ask for it to be paid in a lump sum rather than instalments, so ensure to find out and factor the cost in accordingly. Again, mortgage providers will consider this when assessing your affordability.

Pros and cons of buying a maisonette property

Aside from the freehold versus leasehold debate, there are also more generic factors to consider before buying a maisonette or flat rather than a house:

Pros of buying a maisonette

The potential benefits include...

Cheaper option

Flats and maisonettes are generally more affordable than houses. If you’re unconcerned about sharing certain elements of the building, a maisonette may be the best choice for you. While you may not have your own garden, you may still benefit from private outdoor space if you purchase a property with a balcony.

Shared expenses

Living in a maisonette means sharing certain communal areas. Expenses are split equally among residents, which allows you to benefit from clean, well-kept exteriors and garden (and entrance hall, if applicable).

The community element

When you live in a maisonette you are within close proximity of your neighbour(s). While this may not be ideal for some people, it could be a blessing for others. Neighbours in a maisonette can offer peace of mind and a sense of security which you may not get with a different property type.

Possible drawbacks of buying a maisonette

They can include...

Lack of space

Unless you have a particularly large maisonette, you may not be particularly blessed with space meaning a bit of creative thinking could be required in order to get the best use of the space available.

Lack of privacy

Living in a flat or maisonette always means you’ll have less privacy than you would in a house. With some maisonettes you may enter your home via a communal area, and because you are in such close proximity to your neighbours, you’re also more susceptible to noise disturbances.

Maintenance fees

While splitting costs can have its advantages, it can be challenging if one or more of your neighbours is unwilling or unable to contribute towards repair work. What’s more, you can’t guarantee that everyone will be diligent with payments, so getting something communal fixed may take longer than if it was your sole responsibility.

House rules

Sharing a residence means there are certain rules everyone must adhere to. Some residences do not allow pets, others dictate the decor or what you can or cannot keep in communal areas, and most have strict rules about keeping noise levels to a minimum.

What other factors impact getting a mortgage on a maisonette?

Most lenders will consider the following...

Affordability

As mentioned, if you buy a leasehold property, providers are likely to look into the cost of service charges and ground rent. If it is particularly high, as is often the case with new builds, you may not be able to borrow as much money as you require.

This is because these costs are factored into your affordability assessment. Affordability is calculated by dividing your monthly outgoings by monthly income to get your debt to income (DTI) ratio. The lower this percentage the better, because it suggests you have more disposable income and are therefore a lower risk investment.

If your DTI is too high, a mortgage provider may either refuse to loan to you, restrict the amount you can borrow, or limit your term length.

Loan to Value

Many lenders have a maximum loan to value (LTV) they will lend on for maisonettes and flats, which tends to be less generous than “standard” residential mortgages. Again, new builds may be perceived less favourably meaning providers may require an even lower LTV.

For example, a particular lender might be willing to lend up to 95% LTV (5% deposit) on a standard construction house, 85% (15% deposit) on a maisonette and 80% (20% deposit) on a new-build maisonette.

Job type

Some jobs are seen as higher risk which may further impact how much a provider is willing to lend you, as well as general eligibility for a mortgage on a maisonette. For example, contractors or the self-employed typically have to have 3+ years’ worth of accounts to prove that their income is steady.

Generally, those in full time PAYE employment are considered lower risk, but lenders will take your contract type and length of time in your role into account. Some may not factor any income that has been supplemented with bonuses or commission into your affordability assessment.

Contact a whole of market broker to find out how your job type may impact your mortgage application.

Credit history

Lenders will always be more cautious about lending to those with a history of bad credit. Some may refuse to lend to you if you’ve experienced any form of adverse; others may cap how much they are willing to loan you or ask for a larger deposit.

However, all lenders have different eligibility criteria, so don’t lose faith. Many lenders are more interested in how recent the instance occurred, the severity of the issue, and the story behind it. Find out more on this by visiting our bad credit section.

Why you should speak to a whole of market mortgage broker if you’re buying a maisonette

We’ve helped  countless people find the right maisonette mortgage, even those who may have been declined a mortgage or had bad credit history.

In fact, our customers consistently rate us 5 stars on Feefo, mainly due to our high levels of service, but also because we offer offers a 5-star service with access to expert brokers who are:

Whole of market.

  • Can offer bespoke advice to maisonette buyers.
  • Have a working relationship with all lenders, including those which specialise in maisonettes.
  • Already know the lenders to go to as they successfully arrange maisonette mortgages already.
  • OMA Accredited advisors.
  • Have completed a 12 module LIBF accredited training course.

Talk to a flat and maisonette mortgage expert today

If you like what you’re reading or require more information, call Online Mortgage Advisor on 0800 304 7880 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee, and there’s no obligation or marks on your credit rating.

Updated: 25th June 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.