Freehold flat mortgage advice

Golactico

My sister owns the upstairs flat and the building freehold of a semi-detached house that has been converted to two flats. The downstairs flat is leasehold, with 86 years remaining on the lease. 

The front page of the ‘Counterpart Lease’ document dated 1994 names the freeholder and leaseholder at that time – both of whom have long since sold up and moved on. 

The ‘Counterpart Lease’ makes it explicitly clear that the downstairs flat leaseholder (the ‘Tenant’) must pay for one half of the maintenance costs of the ‘ roof, chimneys, gutters and foundations of the property and all pipes, wires and cables used in common by the upper and lower flats’. 

The document also states; ‘that the expressions ‘Landlord’ and ‘Tenant’ where the context so admits, shall include their successors in title’. 

My sister is looking to re-mortgage but has been told that she is very unlikely to find any lender who will agree to lend on a freehold flat. I’ve done bit of internet research and it does indeed seem that, on the face of it, freehold flats are a big problem for lenders. However, it’s odd that she didn’t have a problem securing her current mortgage from Abbey National (now Santander) in 2007. 

My question is, do the terms of the lease document as described above, mean that the usual risks associated with freehold flats are sufficiently mitigated, making this particular freehold arrangement a safe bet for mortgage lenders? Or is it the case that the attitudes of lenders have simply changed and where they were prepared to lend on freehold flats in 2007, they simply aren’t in today’s market? 

Any advice appreciated.

K_S

@Golactico I think you should still have options as what you've described doesn't appear to be a true freehold flat.

In the scenario described above, a true freehold flat would be both flat-owners owning their own freehold and no leasehold titles at all. Generally speaking, these kind of properties in England are not suitable securities for the vast majority of mainstream lenders.

The scenario described in your post is a flat owner holding the freehold of the whole block and the other flat is subject to long lease.

It may not be for every mainstream lender but this sole issue should not by itself stop a mainstream remortgage.

Golactico said:

My sister owns the upstairs flat and the building freehold of a semi-detached house that has been converted to two flats. The downstairs flat is leasehold, with 86 years remaining on the lease. 

Golactico

K_S - I'm really grateful to you for taking the time to read and helpfully comment on this issue.