Splitting Property Into Two Titles in the UK

As the demand for housing continues to skyrocket, many are considering splitting their larger property into flats which requires splitting property into two titles (or several titles if the property is large enough). Splitting property into flats is a fantastic way to maximise proceeds from the sale of your property while still retaining ownership of the freehold. In this blog, we cover all you need to know about the legal aspect of splitting property into two titles to create flats.

Will I need to create new leases for the converted properties?

You will need to split the title but you do not necessarily need new leases in order to rent out or sell your converted properties – however, you will need to grant new leases on your converted flats in order to sell them to a buyer who will be purchasing with a mortgage. Lease plans will be required to show information on boundaries, communal areas, parking and access to the garden.

How do I split my property’s title deeds at the Land Registry?

The majority of property in the UK is recorded in the land registry, complete with the details of who owns what recorded in the property’s title. As a freehold owner of a property, you can split your property’s title into two or more and create leasehold titles. The application to split your property’s title can be made at the land registry. There will be some conveyancing matters involved and you will need scale drawings of the intended flats. If you are granting new leases to the flats they will also need to be registered – these are all things our conveyancing or title split solicitors can help with. Find out more in our blog on The Title Split of your Property and Creating New Leases.

Can I be a freeholder and a leaseholder at the same time?

Generally, you cannot own both the leasehold and the freehold at the same time. If you wish to own a lease while retaining control over the freehold, you could transfer either the freehold or the lease into a third party’s name. Alternatively, you could set up a limited company and transfer either the lease or the freehold to this company – we discuss this further in our blog on conveyancing for limited company purchase.

Will I need planning permission to split my property into flats?

The land registry does not require you to have planning permission in order for you to split your property into multiple dwellings – however, your local council will likely require you to have full planning permission. There may also be pre-existing restrictive covenants existing on the title which may prevent certain developments from being made. Speak to your local planning authority about what will be required before commencing with any construction work.

Do I need consent from my mortgage lender before splitting my property into flats?

Yes – splitting property into two titles to create flats without consent from your mortgage lenders will likely be a breach of your mortgage terms, which could result in repossession. If the lender does agree to the title split, they may have restrictions on how you may split your property; for example, most major high-street lenders will not allow you to split your property into more than four separate dwellings. Some lenders will require a Professional Consultant Certificate (PCC) before they will lend on a flat has been converted within the last six years. A PCC confirms that a qualified consultant has been checking throughout construction that building work adheres to building regulations and names the consultant as liable for any issues that the lender or future buyers encounter as a result of building regulations being unmet. The 6 major high-street lenders (Barclays, Halifax, HSBC, NatWest, Nationwide and Santander) will only lend on properties built or converted within the past six years if a PCC can be supplied, unless they were built under an acceptable scheme. For this reason, it is best to obtain a PCC to ensure the flats will be mortgageable for future buyers.

Will I need to remortgage with a different lender if I want to live in one of the flats?

You may not need to remortgage if your lender will agree to a deed of substituted security. A deed of substituted security moves your residential mortgage from the entire property onto just the flat you wish to live in.

How long does splitting property into flats take?

The legal work associated with splitting property into two titles (or more) can be completed in between one to three months; however, the land registry often faces a large backlog, meaning it could be twelve months before your leases are properly registered. This can be an incredibly frustrating wait, especially if you need to remortgage – many lenders will only allow you to remortgage once the new leases have been registered. However, some lenders will allow you to complete on your mortgage on the same day that your leases are completed. Starck Uberoi Wealth can help you find a lender who will allow this – call 020 8037 4027 to find out more.

Can I build additional storeys on top of my flats?

As of August 2021, property owners can build up to two additional storeys on top of their property without necessarily requiring full planning permission, in a bid to encourage the construction of more homes. This could be a great way to maximise rental income or sell more flats; read our blog post to find out everything you need to know about extending properties upwards into airspace.

How is access to gardens and parking allocated?

The decision on which property includes gardens and parking falls to the freeholder and is normally made based on personal and financial circumstances. For example, if the freeholder is going to live in one of the flats, they may choose to retain ownership of the garden themselves. Alternatively, they may choose to assign ownership of the garden to a particular flat in order to increase its value. Lender valuation requirements may also determine how parking and garden space is allocated, so it is best to speak to your lender in advance.

Can I split part of my garden?

Splitting property into flats isn’t the only way you can split your title – you may choose to split off some of your garden to be sold for development or even just to your neighbour. However, the process for doing this differs somewhat from splitting property into flats, which we discuss more in our blog post about selling part of your garden.

How much does splitting property into flats cost?

Here are a breakdown of fees that may need to be paid:

• Conveyancing fees: regardless of how you are splitting your property, you will need legal assistance from a conveyancing  or title split solicitor. Our conveyancing fees start at roughly £2000 plus VAT for a property being split into two flats, but will vary depending on specific details.
• Planning permission: The price of planning permission depends on what you are intending to do with your property, with full planning permission costing roughly around £462 per new dwelling. You should speak to the planning authority to find out what permissions you will need.
• Land valuation: If you would like some guidance on valuing the leases, an RCIS can survey your property and suggest a fair price. An RCIS valuer can charge between £150 to £800, depending on a few factors.
• Construction costs: These will need to be factored in when considering splitting your property. This includes the cost of supplying utilities to each separate property and providing separate water and electricity meters.
• Tax: Depending on your property’s value and how much you sell it for, Capital Gains Tax and Stamp Duty Land Tax may be payable. For more information, please read our blog titled Flat Conversion, Stamp Duty Land Tax (SDLT) and Claiming Multiple Dwellings Relief.

How Starck Uberoi Solicitors can help

At Starck Uberoi, we are dedicated to going above and beyond for our clients. Our fast conveyancing service has been accredited by the CQS (Conveyancing Quality scheme), and we work on a fixed-rate basis to ensure an efficient and reliable service that our clients feel confident placing their trust in. Plus, we are on the mortgage lender panels for the majority of high-street lenders including the major 6 UK lenders, meaning that we can act on behalf of lender and client should you need to remortgage. Starck Uberoi Wealth can additionally help you find the ideal remortgage for your property, or advise on lender requirements for splitting property into flats. Their experienced team of mortgage brokers have up-to-date knowledge on the best options available. Call 020 8037 4027 or email info@suwealth.co.uk to book an appointment. For more information, please see the title split page on our website.

To book an appointment with a solicitor today, please call 020 8840 6640 or email us at solicitor@starckuberoi.co.uk.

We have solicitors in Brentford on the High Street in a grand three-story building, just a ten minute walk from Brentford Railway Station.  Our solicitors in Richmond on Thames overlook the  picturesque Richmond Green just a five 5 minute walk from Richmond train station.  Our Belgravia solicitors are located in a prestige location in Grosvenor Gardens and our solicitors in Ealing Broadway are located close to the University of West London.  Finally our Canterbury solicitors  are located in the within the UNESCO World Heritage Site of Canterbury Cathedral.

Our partner, Raminder Uberoi, can also provide a Notary Public Service at all of our London offices.