Understanding the Basics
Firstly, let’s clarify what a flying freehold is. In the realm of property ownership, there are freehold and leasehold properties. A flying freehold, a subset of freehold, typically overhangs another freehold property. Whether it’s a balcony, terraced property, or a unique coach house setup, the scenarios vary, each presenting its own set of considerations.
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Potential Challenges and Solutions
The primary concern with flying freeholds revolves around access rights. Repairs or maintenance might necessitate access through another property, triggering potential issues. Legislation like the Access to Neighbouring Land Act provides protection, but uncertainty looms where flying freeholds are involved.
The Mortgage Perspective
Now, let’s shift our focus to how lenders assess properties with flying freeholds. The good news is that many lenders are open to considering such applications. They often stipulate criteria based on the percentage of the property designated as flying freehold. Common thresholds range from 10% to 25%, varying by lender.
Lender Criteria and Flexibility
Lenders may have nuanced criteria, especially for unique setups like coach houses. Some are more flexible, considering properties with higher percentages of flying freehold, provided there are clear rights for repair and access. However, as the percentage of flying freehold increases, your pool of potential lenders may shrink, especially if coupled with factors like poor credit or complex income situations.
Potential Restrictions and Due Diligence
Be aware that some lenders might cap the loan-to-value ratio at 90% or lower for properties with flying freeholds, reflecting their perceived risk. Conduct thorough due diligence early on, understanding the percentage of flying freehold in the property, and check lenders’ criteria before applying for a mortgage.
Frequently Asked Questions:
What is a flying freehold property, and how does it differ from other types of freehold properties?
Flying freehold is a normal freehold property, but with one crucial difference. The difference is that an element of the freehold property overhangs someone else’s freehold property. This can cause problems when it comes to accessing the neighbouring land for repairs.
What are the unique challenges associated with obtaining mortgages for flying freehold properties?Aside from actually obtaining a mortgage on a flying freehold property. The key difficulty with a flying freehold property is accessing the neighbouring land to carry out repairs, and this is the main thing that any mortgage lender is going to be concerned about.
What eligibility requirements must I meet to qualify for a flying freehold mortgage?
The eligibility requirements to get a mortgage with a flying freehold are no different than they would be for anyone else. You still need to be able to produce evidence of your income and outgoings and creditworthiness like with any mortgage.
Which lenders offer mortgages for flying freehold properties, and what are their specific requirements?
To be honest with you, most lenders will look at properties with an element of flying freehold. There are very few that won’t. However, they each have their own specific requirements. Most commonly lenders will put a restriction on the percentage of the total floor area that can be flying freehold for the property to qualify as mortgagable.
What steps can I take to improve my chances of securing a flying freehold mortgage?
The key thing you can do to prepare for getting a mortgage on a flying freehold property is essentially to make sure that you’ve got all your ducks in a row. Your credit report, your income situation, your outgoing situation, and your personal circumstances should be clearly understood.
How much will a flying freehold mortgage typically cost, and what are the associated interest rates?
A flying freehold mortgage is not likely to cost any more than a regular mortgage.
What legal considerations should I be aware of when purchasing a flying freehold property?
Your solicitor will want to carry out some additional checks prior to you completing on the purchase of a flying freehold property. These checks may include seeking evidence of rights for access to neighbouring land to repair your property.
Are there any government schemes or initiatives that can assist me in obtaining a flying freehold mortgage?
There are no specific government schemes aimed directly at flying freehold properties. However, you are unlikely to be restricted from accessing government schemes purely on the basis that you are purchasing a property with a flying freehold mortgage.
What common mistakes do people make when applying for flying freehold mortgages, and how can I avoid them?
The most common mistake people make before applying for a flying freehold mortgage is not actually understanding how flying freehold works or what it is, or even identifying in the first place if the property has an element of flying freehold.
What is a Flying Freehold Mortgage?
This is just a regular mortgage, but through a lender that is happy to lend against properties with an element of flying freehold and also happy with the additional risk that this potentially entails to them.
What Issues May Arise When Applying for a Flying Freehold Mortgage?
The key issue that could arise when applying for a flying freehold mortgage is applying with a lender that is not familiar or friendly towards properties with an element of flying freehold, causing your mortgage application to be declined.
What Should I Look Out for When Buying a Flying Freehold Property?
Your solicitor will do most of the checks involved prior to completing on a flying freehold property. However, at the earliest possible stage, you need to understand what rights you have to access and repair the property and importantly, what percentage of the overall floor space of the property is flying freehold.
Who Owns the Roof of a Flying Freehold Property?
As far as I’m aware, there’s no hard and fast rule determining who owns the roof of a flying freehold property. That being said, the roof of the property would normally be owned by the person who resides in the upper floor.
Is it Possible to Buy a Flying Freehold Flat?
I suppose theoretically, this would be possible, although it’s not something I’ve seen myself. Freehold flats themselves are quite rare and can be difficult to mortgage.