Share of Freehold Mortgages London

In a standard leasehold arrangement, a separate freeholder owns the building and leaseholders pay ground rent and service charges to them. With share of freehold, the flat owners collectively own the freehold of the building. Each flat is still held on a lease, but that lease runs from the jointly-owned freehold company or co-ownership arrangement. This means no ground rent (or just a peppercorn), collective control over the building, and no absent freeholder problems. Lenders generally view share of freehold positively.

Most lenders who are familiar with share of freehold treat it similarly to leasehold for mortgage purposes, with the individual flat's lease term being the key factor. However, some lenders have specific requirements: they want to see a formal lease, a deed of trust or shareholders' agreement, and confirmation of how the freehold is held. Some lenders are not familiar with share of freehold and can cause unnecessary delays. We select lenders who understand the structure.

Typically you need: the lease for the individual flat (even in a share of freehold, each flat usually has a lease), the title register showing the freehold ownership, and a deed of trust or shareholders' agreement confirming how the freehold is managed and what happens if a flat is sold. In informal arrangements where documentation is missing or incomplete, your solicitor will usually need to put new documents in place before the mortgage can proceed.

It can be with some lenders. When only two flats share the freehold, there is no mechanism for majority decision-making if the co-owners disagree. Some lenders prefer three or more co-owners for this reason. However, many lenders are comfortable with two-flat share of freehold arrangements provided there is a proper deed of trust in place that sets out how disputes are resolved and what happens when a flat is sold.

Yes. Even in a share of freehold property, the individual lease term matters to lenders. At 75 years, you are below the 80-year threshold where lease extension premiums increase significantly under the statutory route. Most lenders want 85 years or more. The good news is that extending the lease in a share of freehold property is usually much simpler than in a standard leasehold, as you are effectively extending your own lease from the freehold you jointly own.

It is possible but the documentation needs to be in order first. Informal conversions where the freehold ownership, leases, and management arrangements have not been properly documented are a common problem. Your solicitor will need to formalise the arrangements: creating proper leases if they do not exist, registering the freehold title correctly, and putting a deed of trust in place. This takes time but once done, most lenders will be comfortable with the arrangement.