Flying Freehold Mortgages

A flying freehold property is where a section of it comes under the freehold ownership of an adjacent property. This is often the first-floor room structurally above or overhanging part of a building that's owned by the property next door. The upper property owner doesn't own the land or building underneath the "flying" part. Some examples of flying freeholds include:

• Multi-storey buildings where the layout of the rooms prevents a vertical division
• Properties which rely on structural support of an attached property, for example, those situated on a steep hill
• The property has a balcony that extends over land owned by someone else
• There's a room on the upper level which extends over a shared archway or walkway

Some people may not even realise they live in a property with a flying freehold. Sometimes it's only discovered during the sale or purchase of a property.

There are two main types of property in England and Wales, freehold and leasehold, and there are some important differences between the two:

Several potential issues can arise with a flying freehold property, for example:

1. Property Owner Refuses Access – a neighbour may refuse the homeowner access to their property, despite there being the necessary access rights in place
2. Disputes Between Freehold Owners - neighbours may disagree over the freehold, making it difficult to come to agreements on access or future repairs
3. Noise Between Lower and Upper Properties - if the flying freehold element concerns part of the property that underlies or overhangs the adjacent property, without sufficient insulation, noise from one property could adversely affect the other (and potentially vice versa)
4. Right to Put Up Scaffolding on the Property Above or Below the Freehold - while the owner of the property above may require the use of scaffolding, the owner of the lower property may refuse access or charge a fee
5. Legal Rights Don't Always Mean Neighbours Will be Cordial - even with the appropriate legal rights in place, it doesn't mean that neighbours will be accommodating or honour any prior agreements. Sometimes, the only way to resolve flying freehold disputes is through the courts, which can be very expensive
6. Water Leaks from Flying Freehold to Neighbour Property - if the flying freehold element contains a bathroom that leaks, it may put the underlying property at risk
7. Inadequate Maintenance on Flying Freehold - a property owner is not legally obliged to maintain their property or make repairs. But if they have a flying freehold element to their property that falls into disrepair, it could cause serious problems to the adjacent property

If you're wondering, can I get a mortgage on a flying freehold? The answer is yes, but you'll need a flying freehold mortgage. Due to the complex legal covenants associated with these homes, some lenders will refuse to lend on this type of property. Getting a mortgage for this type of property is still possible, especially if only a small part of the property is flying freehold. However, most lenders will have specific criteria to meet before your mortgage application is accepted. These criteria will vary depending on the lender.

Freehold maisonettes and flats aren't very common. However, they do exist and can be more challenging to mortgage. There are also several legal issues to consider when flying freehold properties, and lenders typically consider applications on a case-by-case basis. Most lenders will only consider properties where the freehold makes up less than 20% of the total floor area, although this specific percentage can vary according to the lender.

Most flying freehold lenders require at least a 20% mortgage deposit, although some will accept 10% to 15%. Before a lender approves your application, your solicitor must confirm that there are sufficient rights of support and that there’s a process for enforcing maintenance or repair.

If you’re considering buying a flying freehold property, you must check that the flying freehold has been correctly established. The flying freehold should be reflected in the title deeds irrespective of whether or not they’re registered at the Land Registry for either underlying or overhanging properties.

Covenants

There should also be the necessary covenants that provide the necessary rights to enter the next-door property to repair or inspect as required. These covenants must also prevent your neighbours from making alterations to their property which may impact the structural integrity of the part of the building that overhangs or underlies yours.

Legal Options

According to the Neighbouring Land Act 2002, property owners are entitled to access adjacent properties to make necessary repairs to their own property, but not their neighbour's property. This can become challenging if the condition of the next-door property affects your ability to repair your own. A new deed of covenant can be created between two freehold owners, giving them equal rights and obligations. But this doesn't automatically transfer to new owners. They would have to agree to this agreement to be upheld after the sale. It can be a long and expensive process, but it can sometimes offer an immediate solution.

Indemnity Insurance

Mortgage lenders for flying freehold mortgages will typically require you to arrange flying freehold indemnity insurance as a condition of approving the mortgage. There are specialist insurance providers who offer this type of cover. Indemnity insurance is essential for the homeowner as it provides compensation should the flying freehold status be omitted from the property deeds. It can also finance any legal issues a homeowner may face with neighbouring freeholders should they arise. Your indemnity insurance cover may become invalidated if you make any structural renovations to the property. Therefore, it's important that you carefully read the terms of the policy.

The owner of the roof of a flying freehold property is whoever owns the upper part of the property. However, if the roof needs repair, both homeowners are usually responsible for paying for repairs as each will equally benefit from a repaired roof. Your solicitor will be able to verify who is responsible for the roof's maintenance and repair during the conveyancing process.

Flats aren't usually considered flying freehold, although some do exist. Most flats tend to be sold as leasehold properties as the property owner doesn't usually own the land the flat is built on. Freehold flats are rare and can be much more challenging to get a mortgage on.

A flying freehold doesn't automatically mean a property isn't a good investment. However, these properties do come with more risk than others, especially if there are no right agreements in the title deeds.

As with any property purchase, buying a flying freehold property requires careful consideration and professional legal and mortgage advice. You'll also need to factor in the extra costs involved with this type of property, including a flying freehold indemnity insurance policy and legal fees. If there are the necessary positive covenants in place, combined with an appropriate insurance policy, buying a flying freehold can be a sound investment.

If you need a flying freehold mortgage to buy your next property, your best option is to get in touch with an independent mortgage broker at John Charcol. We have access to an extensive range of lenders and can help you find the right flying freehold mortgage lender at a competitive rate. Contact us today on 0330 433 2927 or submit an online enquiry to find out more.