There are some areas of England where these types of arrangement are commonplace but they are limited exceptions and even then only a few lenders will lend in such circumstances.

The legal problem is that there is no automatic system of making the liabilities to pay monies run automatically with freehold land – this means that within the building your freehold flat is situated you are reliant upon your neighbour to maintain part of the structure such as the roof mains walls or foundations and yet there may not be a clear legal obligation or agreement between you to force each other to carry out those repairs or spend the money on sharing the cost of those repairs.



Even if there is an agreement at present it can be easy to break this agreement if one freehold flat is sold on without the new owner entering into the same agreement.

With a leasehold obligations can run with the land and therefore it fixes the problem of maintenance and repair (although it requires specific covenants in the lease).

Because of the legal problems associated with a freehold flat and the lack of lenders the value of such properties are adversely affected. It also makes the flat more expensive to remortgage because there are very few lenders who will lend on it.

If you would like to discuss mortgages further please get in touch.