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Splitting The Title of a Multi-Unit Freehold Block of Flats

split title for semi commercial properties

Title splitting is a process in which a property investor, acquires a single multi-unit freehold block of flats and both physically and legally separates it into multiple individual leasehold units. Whilst this can be completed on sale of the property, this can also be completed on purchase and during the ownership of the property.

The benefits of splitting the titles of a multi-unit freehold block of flats

The aim is that when combined, the value of the individual units will be greater than that of the multi-unit freehold block of flats. Therefore, increasing the overall value of your portfolio.

Alongside this, as each individual unit will be on their own mortgage you have the flexibility to sell off individual leasehold units if you so wished whilst retaining the freehold interest.

How does Title Splitting work?

Title Splitting involves splitting a multi-unit freehold block both legally and physically into individual self-contained units. For the strategy to be effective you need to add physical value to the property, such as through refurbishment, just splitting the titles alone is not enough for the strategy to be as effective as it can be.

The aim is to either sell these leasehold units to a third party and realise a profit, or they can be retained as an investment.

When retaining as an investment, the freeholder and leaseholder cannot be the same legal entity. The freeholder also cannot grant themselves the leasehold interest.

Instead, the leasehold can be sold to a separate limited company of which you are a director and shareholder of. This way you are retaining the asset but as a separate legal entity.

What are my financing options for completing a Title Split?

This depends on when and how you complete the Title Split.

First and foremost, if you require funding for the initial purchase then you can utilise bridging finance, which is a form of short-term finance. This bridging finance will allow you to borrow funds to acquire the property and allow you to complete the required works to the property in order to split the titles. In some cases, these lenders could also lend up to 100% of the refurbishment cost reducing the level of own funds you need to put into the deal upfront.

Once the property has been refurbished and split physically you can then look to exit onto a long-term mortgage by splitting the titles legally. By splitting the titles legally, a leasehold interest is created, and the individual units will be able to go on their own long-term mortgage.

There are many methods for completing this transaction, each of which have their own individual benefits. It is key to speak with a solicitor who thoroughly understand title splitting as they will be able to advise on the best method of completing the title split.

Depending on which type of title split transaction you use will then determine the type of lenders available to you.

Each lender is different as is their criteria when it comes to Title Splits. Therefore, it is important to seek advice from a mortgage adviser who fully understands the Title Split transaction, this is where Advocate Finance can help and offer real value to your portfolio.

Where can I learn more about the Title Split Strategy?

Advocate Finance has teamed up with who specialise solely in the Title Split strategy.

Through their expert-led content and courses they will walk you through the Title Split strategy from start to finish.

The  link below will direct you to’s website where you will be able to find out more information on the Title split strategy.

How can Advocate Finance help you?

At Advocate Finance we are here to take the stress out of your Title Split process. Thanks to our unmatched knowledge of lenders and their criteria, we can find lenders that can cater for your individual funding needs.

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