You may have come across the term ‘flying freehold’ in your property search. If you are wondering what it means, you have come to the right place. In this article, we will detail what a flying freehold is and look at what it means for you as a buyer or seller. As always, if you have any questions, you can contact Think Plutus to speak to an expert.
What is a flying freehold?
As is so often the case with property law, the concept of a flying freehold appears straightforward in theory, but can become far more complex in practice.
The basic definition is quite simple: part of the property that has the flying freehold is either on top of or below another person’s property. That’s where the ‘flying’ part comes from, but the property does not need to be in mid-air to meet the definition for a flying freehold.
There are many scenarios where a flying freehold might occur. The more common reasons a solicitor might flag a property are as follows:
- Semi-detached/terraced properties where the division between next door neighbours is not a straight vertical line.
- Rooms directly above shared passageways.
- Basements/cellars that are underneath a neighbouring property.
- Maisonettes/houses where a portion of the property goes over or under another freehold property.
- Balconies that overhang the neighbour’s property.
As you can see from these examples, there are quite a lot of reasons why a property could be deemed a flying freehold. They are all connected by an underlying theme, however: part of the property is either above or below another freehold tenure.
More often than not, the percentage of the overall property that is above/below the neighbour’s is very small. Many homeowners are not even aware they are living in a flying freehold until they try to sell or remortgage, and this is where problems can arise.
Problems with flying freeholds
Conveyancing solicitors often approach flying freeholds with caution. Whilst most flying freehold owners have no problems at all, the legalities of the situation can be problematic.
The main source of the concern is that there is a lack of positive covenant enforcement between the two freeholders involved. Back in 2011, the Law Commission stated that it would be helpful for the legislation around surrounding covenants to be updated and simplified, but there still has not been a law change from Whitehall. The system will inevitably be updated at some point but, until then, solicitors will still approach flying freeholds with caution.
From their perspective, there are many things that could go wrong, and the legal issues that could arise would be complex. The most frequently-cited problem is renovation works, with the concern being that the two parties involved may be unable to reach an agreement over the work. In the past, there have been problems like additional costs, refusal of access and protests, all of which make solicitors reluctant to sign off on a flying freehold.
Are the flying freehold concerns justified?
From a legal perspective, yes they are, but the real world usually doesn’t operate in black and white. Legal experts have every reason to be concerned about potential problems, but very few of them actually materialise in practice. Again, most people living in flying freeholds have no problem at all.
The reason for this is that, for problems to arise, the adjoining property would have to have been neglected to the point that the disrepair begins to affect your property. Most freeholders would act to address the issue before it gets to this point. After all, the home is often the biggest investment a person has.
People like to protect their investments, and this desire usually negates concerns over covenants. However, it is completely understandable that solicitors bring these issues to the fore when carrying out conveyancing.
What about borrowing?
Unfortunately, a flying freehold mortgage can often be a difficult thing to secure. Many lenders stipulate certain rules about borrowing against a property with a flying freehold. However, it is far from impossible to get a loan or for a seller to sell. Some mortgage companies will not offer mortgages at all on flying freeholds, but there are plenty who will approach each application on a case-by-case basis.
In many cases, the lenders requirements will be as simple as positing a maximum percentage of the overall property that can be ‘flying’. Some other lenders apply more stringent measures. It is important to be completely honest with lenders and ask them if there would be any issue before you pay out anything for conveyancing, surveys, etc. It helps to be informed early on than to waste money later.
Other things to consider
When buying a flying freehold property, it is likely that you will need specialist cover. This is commonly referred to as ‘flying freehold indemnity insurance’. This is unlikely to be an enormous expense – often, quality cover is available for just a few hundred pounds – and it could be a lifesaver later on.
With flying freehold indemnity insurance in place, you should be protected if you turn into problems with your neighbours. It will cover both loss and expense that relates directly to the flying freehold. However, it does not rectify the deeds, so you will not be able to force your neighbour to complete work pre-emptively in order to protect your property.
Taking things forward
If you have your eye on a property with a flying freehold property and would like to move forward, the first thing to do is to get the opinion of a conveyancing solicitor. Be advised that the information in this article is intended for general purposes and is no substitute for full legal advice.
Think Plutus can point you in the direction of a reputable solicitor if you need assistance. We can also offer advice on placing your mortgage application with the right lender when attempting to purchase a property with a flying freehold.
For expert, whole-of-market mortgage advice, Think Plutus.