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Welcome to Advocate Finance, your trusted broker in securing multi-unit freehold block mortgages!
As established buy-to-let and commercial finance brokers, we understand the unique needs of property investors and business owners. We are here to provide tailored financial solutions that help you achieve your goals.
Whether you are looking for a MUFB mortgage, loan or refinance, we cover all aspects to ensure your success.
This is one freehold residential property split into multiple flats that don’t have their own individual title. Often abbreviated as MUFB’s, this type of asset class is proving to be very popular for many landlords.
However, financing MUFBs is not as straightforward as it may be for simple singular houses and flats. There are fewer lenders available and many mortgage advisers do not have the required level of expertise. Fortunately, our Advisers are experts in this area of Buy-to-Let lending. We also have access to a large range of lenders and products, that will best suit the scenario you are faced with when it comes to Multi-Unit Freehold Blocks of flats.
Finding a solution for your standard blocks of flats is not too problematic in the current market. However, when there are quirks and unusual circumstances related to these properties, this is when it can become challenging. Fortunately, the knowledge we have in this area allows us to find you a solution when no one else can.
What do we mean by quirks and unusual circumstances being related to your MUFB?
You will have read in the section above that there are general rules on when a multi-let, HMO property requires a licence. But the local council can change this and implement their own requirements.
Lenders therefore cannot keep track of which councils have moved away from the general definition of when a licence is required. The lender will therefore require confirmation in writing or email, from the council when the property does not require an HMO licence.
For HMO properties that do not require a licence, the next important factor in selecting a lender is:
Using the services of a broker that understands how the property is valued is crucial as it affects the amount you can borrow.
Our mortgage brokers will carefully consider the suitable lenders for your circumstances depending on how much you are looking to raise relative to the value of the property. But the property’s value can differ depending on the valuation methodology the lender instructs the valuer to use.
With respect to MUFB properties, the biggest difference is whether the lender will use a Block value/Market Value or an aggregate/break-up value of the property.
Block Valuation | Aggregate Valuation |
This is used for purchases rather than refinances and is effectively the market value of each unit but with a 10%-15% discount applied to the total. This is because the investor is buying the whole block of flats, and as such is expected to command a block discount. | This is the value of each individual unit as if it was on its own leasehold title, but without the need to legally split the title. This is typically higher than a block valuation as the discount is not applied, so preferably used for refinances as you already own the property. |
Advantages of MUFB | Disadvantages of MUFB |
Overall Yield and Income Sources: The potential yield produced from an MUFB will also attract investors to these properties as they tend to produce higher yields. This is because of the block discount and the rental income being the same as equivalent long leasehold flats. | Charges: Some larger blocks of flats can involve large capital sums and the deposit requirements can be large for investors that do not have access to larger deposits. |
Block Discount: MUFBs consisting of multiple units are often cheaper to purchase, than if you were to buy the equivalent number of flats but as separate units – this is referred to as the block discount. | Lenders: There is a large panel of lenders that will provide mortgages but this is still far less than for standard houses or flats. |
Less Expenses and Good Investment: they don’t have the operating expenses associated with HMOs and run-down multi-unit blocks can form part of your BRRR strategy, which can also involve title splitting at the end of the refurbishment to create individual leasehold flats. | Experience: Some lenders will require existing landlord experience. |
Less management time: They are easier to manage than multiple individual flats and houses as they are all within the same block. This will help improve your time management across your portfolio as you are not having to drive to multiple properties. |
Expertise and Experience:
Tailored Financial Solutions:
Competitive Fee Structure
Comprehensive Range of Services:
80% loan to value is the current maximum where the only security provided to the lender is the MUFB.
However, we have lenders that can consider lending with an additional security charge on another property with sufficient equity, meaning that we have successfully arranged mortgages of 100% loan to value for MUFBs.
Absolutely – Whether the property is converted or a purpose built block of flats, makes no real difference to a lender that will provide a multi-unit freehold block mortgage.
We have arranged mortgages and loans for large numbers of freehold houses that have, over the years, been converted to 2 or more flats.
The main difference is the shared facilities and services.
The other big difference is utilities such as electricity, gas and water.
This is a mis-conception that Banks don’t lend on multi-unit blocks of flats.
High Street Banks have commercial departments who can lend on these properties, same as specialised banks and other specialised lenders who have the internal expertise, knowledge and experience to provide quick credit decisions.
Yes – You can and we have arranged mortgages for clients who have been in this position and resided in the block.
However not all lenders allow this so it is important to select the correct MUFB lenders to approach and clearly present the circumstances to the lenders.
You can obtain a buy-to-let mortgage for a multi-unit freehold block.
There is sometimes some confusion as to whether you need a buy-to-let or a commercial mortgage for a multi-unit freehold block.
Our advisers offer a free consultation, so please give us a call or use the “Get in Touch With Us” form at the end of this page
Our expert team of mortgage brokers are here to guide you through every stage of the process.
Important Information
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
We are a credit broker not a lender.
Advocate Finance Ltd, registered at 55 Crown Street Brentwood, Essex CM14 4BD. Company Register number is 05579380. Authorised and Regulated by the Financial Conduct Authority. Our FCA registration number is 592830.
You can check via www.fca.org
We are registered with the ICO, Z1654205 and you can check via www.ico.org.uk.
We conduct both regulated and unregulated business and therefore not all products provided through us are regulated by the Financial Conduct Authority. We source mortgages and loans from a panel of lenders.
We may receive a commission that will vary depending on the lender, product, the amount borrowed or other permissible factors.
Advocate Finance is a mortgage and finance brokerage firm that specializes in securing loans and mortgages for various types of properties, including single properties, large portfolios, commercial sites, and development projects. They assist clients regardless of credit history, circumstances, or legal ownership, aiming to provide tailored financing solutions