Flying Freehold

m3mcu

Looking for some advice , I have today looked at buying a flying freehold property it is basically a third of a victorian house with a fair few clauses...

The first I was told by the estate agent is that I can not re-rent the property out but he said I would be ok to do so, as it has been rented for the last 30 years, so was this illegally done, and could it be done again, don't really understand?

The second is that I wouldn't be able to get a mortgage on the flat as there is a flying freehold due there being another flat sandwiched between the garage of the property and the actual property it self.

Advice would be greatly received this is my first opportunity to get on the ladder.

puddy

we were looking at a really lovely place in january of this year. i was in love with it, but when i rang to view it, the EA told me that if i was needing a mortgage then it was pointless me seeing it as they had just had a sale fall through (i kept seeing this house on and off the market, it was for sale for over 3 years), and the solicitor had found a flying freehold. the EA reckoned that in the past, when banks were lending loads, it wouldnt have been a problem but now they were getting cautious and so I wouldnt have been able to get a mortgage.

i was really sad about it but in hindsight it needed a lot of work doing to it. it then sat there until quite recently on right move, price dropping all the time, its not there now, so someone may have been able to buy it

things may have changed, its nearly a year ago i was told that, you'd be best ringing lots of lenders.

SLINKI

We have lived in a 4 bed flying freehold for 3 years, It can be difficult to find the mortgage but if its the place you want its worth it we have more garden more internal space and privacy that we would not have got for the money we had. use brokers to get you any mortgage, do not go direct to banks its only 1 lender and 1 price we live in ours for less than 100 quid a month

Elmocash

Hi, I was thinking of taking out an insurance indemnity policy to cover me against costs arising from any dispute arising from the flying freehold that exists between my and my neighbours Victorian semi's.
The flying freehold of my neighbour's front bedroom covers my hallway and was obviously built like that, and I lose a corresponding amount of my front bedroom. The roof space above was originally open between the two dwellings, but was recently walled up in blockwork to follow a line over the extent of the FF into my side. I suspect it was done just before I moved in when I was buying as mine was empty. My neighbour denies he did it claiming it was like it when he moved in. He has subsequently converted his loft and I believe the space is now a stairway.
Will this insurance cover me for any costs arising from any dispute that could arise, he told he is planning to move.

Elmo

wuls

Flying Freeholds are accepted by Santander, RBS, Nationwide, Lloyds Banking Group, Yorkshire BS and Yorkshire Bank/Clydesdale as well as, on certain conditions, a bunch of others too.

Your biggest issue is that increasingly you are required with flying freeholds to have all the legals sorted out properly (an enforceable scheme of covenants) rather than insurance. Whilst this isn't perfect in terms of implementation, it's much closer to 'rock-solid' mutual protections that lenders so crave (and it is used all the time in commercial property including London Underground stations so it's tried and tested).

Reckon that increasingly these covenants will be required. That's good and bad. More banks are accepting flying freeholds which conform with these covenants but less banks will eventually accept indeminity insurance instead.

Richard_Webster

Flying Freeholds are accepted by Santander, RBS, Nationwide, Lloyds Banking Group, Yorkshire BS and Yorkshire Bank/Clydesdale as well as, on certain conditions, a bunch of others too.

Your biggest issue is that increasingly you are required with flying freeholds to have all the legals sorted out properly (an enforceable scheme of covenants) rather than insurance. Whilst this isn't perfect in terms of implementation, it's much closer to 'rock-solid' mutual protections that lenders so crave (and it is used all the time in commercial property including London Underground stations so it's tried and tested).

Reckon that increasingly these covenants will be required. That's good and bad. More banks are accepting flying freeholds which conform with these covenants but less banks will eventually accept indeminity insurance instead.

This last bit is true - Santander have just changed their policy and won't accept indemnity insurance.

The mutual covenant scheme is all very well but you are always beholden to the person in the other house when you want to sell. You have to get him to enter into a deed of covenant with your buyer and he just sits there and doesn't understand when some legal document is thrust in front of him to sign. So the problem with such a scheme is that sometimes the other people refuse to sign and a sale is lost while you are arguing over it. Much easier to get a policy then you don't have to get involved with the other person.

As wuls suggests - if more banks follow Santander's example we will have to advise our clients against flying freeholds.

What is often annoying is that very often they are caused by sloppy conveyancing. For instance the very common situation where there is a tunnel or ginnel through the middle of a terrace to get to the back gardens is easily dealt with. Whichever house has the rooms above the ginnel should have the freehold of the passageway at ground floor level and this should be subject to rights of way for those needing to use it. Then there is no flying freehold.

It can be more complicated. Southampton City Right to buy sales often have involved the first floor front room over the passage being in one house and the back room in the other - so the front part of the passage belongs to the house with the bedroom above and the back part to the house and they have rights of way over each others land - simple and sorted. Again no flying freehold.

However others I have seen are really silly - they divide the ownership down the middle of the passageway lengthways even though the front room upstairs over the whole passageway is in other house and the back room in the other - entirely avoidable but a flying freehold has been created.

wuls

Whilst I agree the mutual covenants with appropriate restrictions at the Land Registry are not 100% absolutely perfect, once they are in place the first time, it is relatively straightforward subsequently as everyone knows they are mutually beneficial.

My point was more that if they are in place, I believe lenders will continue to lend and therefore clients should be happy buying/selling Flying Freeholds with this in place (and perhaps with indemnity too as back up).

Likewise, if they are not in place, indemnity seems like it is fading in usage and therefore buying/selling flying freeholds which dont comply with 5.5.2.2 might become more difficult.

I think that a distinction between flying freeholds will therefore increase.

To the point on sloppy conveyancing. I have seen a few where the layout is very straightforward, but very often the dominant party (the actual freeholder) can't be bothered to enter into a Landlord/Tenant relationship (even if just a technical 999 year lease) with the flying freeholder.

It all depends on the layout and incentives (I have typically found that making a 'commercial' payment makes most relent and enter into Freeholder/Leaseholder relationships)

tushar46

Great i have no much knowledge about this but could understand little bit

wuls

Actually the Santander rules are not as strict as they might sound.

Their answer to the Flying Freehold question is

Yes, provided the title to the property incorporates (or will incorporate prior to completion of the mortgage) satisfactory and enforceable rights of support, shelter and repair, together with appropriate rights of entry. Indemnity insurance as per 5.5.2.4 is not acceptable.

This appears not to be the same as full compliance with 5.5.2.2. Itis similar to the requirements Northern Rock require. Many Flying Freehold properties already have Rights of Support, Shelter, Repair and Entry in the Title Deeds. These stay with the property and don't need to be signed every time on sale.

What most flying freeholds don't have is scheme of enforceable mutual covenants for (1) each property owner covenants to maintain explicitly the parts which offer support/shelter to the other and the right to repair each others properties if you don't make the necessary repairs yourself.

Any views?

sevens100

I'm looking to purchase a property with a flying freehold (one bedroom is above next doors kitchen). It is less than 25% of the upstairs area which I understand is a concern for lenders.

Do most mortgage lenders lend on flying freehold properties? If they do lend do they charge higher interest rates?