MULTI-UNIT FREEHOLD BLOCK MUFB
Multi-unit Freehold Blocks can be a great alternative to an HMO, and an excellent investment for landlords and property owners alike, either as their strategy or as part of a diverse property portfolio.
If you are looking to get into the Buy to Let market and find potential property purchases with excellent rental yields, that’s something we can help with.
Discounted property with high yields
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Investment opportunities tailored to your requirements
WHAT IS A MULTI-UNIT FREEHOLD BLOCK?
A Multi-Unit Freehold Block or MUFB is a block of self-contained flats or apartments that, unlike an HMO, do not share common spaces.
A MUFB could have a single floor and several self-contained apartments or many floors with only a few self-contained flats as long as one landlord sources all the rental units.
Multi-Unit Freehold Blocks are popular with landlords and residents alike in highly populated areas like cities, as they provide self-contained security that a House of Multiple Occupations does not.
The landlord or property owner could own all or only a portion of the units within the block and then rent these out to tenants.
WHAT ARE THE COMMON FEATURES OF A MULTI-UNIT FREEHOLD BLOCK?
A Multi-Unit Freehold Block should be solely residential, and no dwellings should have a separate lease. The property could be either purpose-built or a property conversion.
As the apartments are self-contained, they include their own kitchen and bathroom facilities, with each flat typically having its entrance from the exterior of the building.
A MUFB is legally seen as a single freehold property physically divided into multiple flats without individual lease agreements, and the entire property is held on a single title.
HOW DOES THE MULTI-UNIT FREEHOLD BLOCK OWNERSHIP STRUCTURE WORK?
Although a landlord or property owner owns the property, each individual unit is also owned by individual freehold owners. Each department within the block is owned outright by its respective owner.
For property investors, MUFBs provide an opportunity to own a portfolio of properties without having to purchase each unit separately. It allows residents to own their homes while sharing maintenance costs and responsibilities with other residents.
Maintenance responsibility is usually shared between the freehold owners and a management company, ensuring that the property is well-maintained and that any issues are addressed promptly.
ARE MULTI-UNITS FREEHOLD BLOCKS PROFITABLE?
Property investors and landlords find Multi-Unit Freehold Blocks a more lucrative option than other property investment routes because they benefit from increased efficiency production.
They are far more profitable than standard buy-to-let properties as there are more properties than in a multi-unit freehold block. However, there are several costs that you should consider when you are setting up and running a Multi-Unit Freehold Block:
- The initial setting-up costs like installing bathrooms, bedrooms, living rooms, kitchens, fire doors, door closers and locks.
- Council Tax & Utility Bills.
- Repairs & Maintenance.
- Rent Arrears & Voids.
- Finance Costs & Insurance.
We can source properties across the UK!
We can source properties across the UK!
HOW DOES RENT WORK IN A MULTI-UNIT FREEHOLD BLOCK?
Within a Multi-Unit Freehold Block, the units are owned by different individuals, one or multiple landlords, but all unit owners collectively own the land and common areas.
Each unit owner is responsible for paying their share of the expenses related to the maintenance and upkeep of the common areas.
Rent is typically paid by tenants who occupy one of the units within the MIFB. The tenant pays rent to the unit owner who owns the unit they are renting.
The unit owner is then responsible for paying their share of the expenses related to the maintenance and upkeep of the common areas.
Who are the best tenants for Multi-Unit Freehold Blocks?
As house prices remain unattainable for many young people, the demand for affordable rented accommodation remains strong.
MUFBs are especially popular within commuter towns as young people look for affordable housing in the countryside while being able to travel to larger cities to work.
Students and young professionals are also a safe bet with Multi-Unit Freehold Blocks as they offer long-term tenancy opportunities due to course or placement lengths.
Young families who are yet to climb onto the property ladder may find a self-contained apartment more attractive than a shared apartment like an HMO, as they will have their own space.
Why a Multi-Unit Freehold Block is a good investment for you?
As with any property investment, a particular aspect of the risk is involved, so it’s essential to weigh the disadvantages and advantages of Multi-Unit Freehold Blocks.
What are the advantages of MUFBs?
Multi-Unit Freehold Blocks offer higher rental yields than traditional buy-to-let properties as they offer multiple apartments in one building instead of just a single flat. This may reduce the risk of cash flow issues within your Buy to let and support diversification.
Due to the increasingly unattainable property ladder, many young families, professionals and commuters are turning to self-contained freehold apartments for places to live that provide independent living while not having to pay for a house.
Although we have suggested the ideal tenants for a Multi-Unit Freehold Block, all kinds of tenants are attracted as they offer more flexible living arrangements.
MUFBs benefit from lower administrative costs because they are far less time-consuming than an HMO. Freehold owners are responsible for maintaining their properties rather than relying on a management company or the landlord.
What are the disadvantages of MUFBs?
As the landlord, you should ensure that the building is adequately insured, as Multi-Unit Freehold Blocks are prone to disasters, disagreements between tenants and accidents. The insurance should cover individual units and shared spaces like elevators or stairways.
A Multi-Unit Freehold Block can be built for purpose, but most of the time, they are already existing buildings that have been converted, both of which will be costly as you look to add adequate facilities like bathrooms, bedrooms, living rooms etc.
Unlike leasehold properties which allow landlords to create strict rules and regulations, a freehold unit will give tenants more say in their property. While this is an advantage for tenants, it may mean you spend more money fixing any damages or repainting walls when you have a vacancy.
WHAT ARE THE DIFFERENT TYPES OF MULTI-UNIT FREEHOLD BLOCKS?
A Multi-Unit Freehold Block can be any property type in any area as long as each dwelling or residence is self-contained and can be rented out to different tenants, with all tenants having their own Assured Shorthold Tenancy (AST). Multi-Unit Freehold Blocks will differ depending on the budget or goals of the property owner; here are some examples:
- Purpose-built block of flats.
- Converted Georgian or Victorian house.
- Multiple terraced houses held under a single freehold title.
But, although the property types will differ significantly, all units must have their own bathroom, kitchen, private entrance, AST, and utilities. Some MUFBs will have communal areas like hallways, gardens and patios.
MULTI-UNIT FREEHOLD BLOCK QUESTIONS
In the United Kingdom, there is no minimum size requirement for a Multi-Unit Freehold Block, but it is important to note that there may be legal requirements depending on the number of units within the block.
The price of a Multi-Unit property will differ depending on the location and condition of the building. But, in January, the average UK flat/maisonette price was £250,328 which is 3.6% more than the year before. If you were looking to buy several units within a complex, it might cost you around £1,750,000.
A Multi-Dwelling Unit Condominium is the Americanism for a Multi-Unit Freehold Block. A condominium, or condo, is an individually owned residential unit in a building composed of other residential units.
Unlike an HMO, Multi-Unit Freehold Blocks do not need to be licenced.
Want to get involved with a MUFB?
Want to get involved with a MUFB?
WHAT IS A MULTI-UNIT FREEHOLD BLOCK MORTGAGE?
Multi-Unit Freehold Block Mortgage will allow you to have all your mortgages under one roof instead of many different mortgages. This will be less time-consuming and potentially save you money.
A MUFB mortgage will remove most of the complexities of managing multiple Buy To Let mortgages whilst keeping on top of changing terms and tenancy agreements.
Buy-to-let mortgage rates for multi-units are higher than standard buy-to-let options for individual units, but the right mortgage provider should be able to offer you competitive rates.
You can only get a mortgage on a freehold property with certain mortgage providers who will have a strict set of criteria assessments. We recommend that you seek the help of a financial adviser or mortgage broker before making any financial decisions.
What types of mortgages are available for a MUFB?
Multi-Unit mortgages are available on both interest-only and interest and capital repayment bases.
Interest and Capital Repayment mortgages are attractive for investors and landlords looking to generate more equity in the building over time instead of repaying the entire loan at the end of the mortgage term.
What is the criteria for securing a Multi-Unit Freehold Block Mortgage?
Different lenders will have other eligibility criteria for multi-unit freehold block mortgages, but here are some general terms and factors that you will typically see:
- The maximum loan-to-value (LTV) is around 75% but can be up to 80%.
- Mortgages are available to individuals and limited companies so landlords and property owners can decide on their desired level of personal liability and, in many cases, use their Special Purpose Entity to make their investments far more tax efficient.
- Lenders are more likely to give this type of mortgage to experienced landlords rather than first-time buyers, but some mortgage lenders will consider those new to multi-unit freehold blocks.
- There might be restrictions on the number of units allowed within the freehold.
- The interest cover ratio (ICR) will likely be based on the expected rental value.
- Most providers will only provide loans to those aged 18 or over; some may insist that you are 21 or over. Upper age limits may also be imposed as senior owners can be seen as higher risk.
When it comes to taking out a multi-unit freehold block mortgage, the affordability criteria are far more relaxed than a typical residential mortgage:
What Is A Multi-Unit Freehold Block Mortgage?
A Multi-Unit Freehold Block Mortgage will allow you to have all your mortgages under one roof instead of many different mortgages. This will be less time-consuming and potentially save you money.
A MUFB mortgage will remove most of the complexities of managing multiple Buy To Let mortgages whilst keeping on top of changing terms and tenancy agreements.
Buy-to-let mortgage rates for multi-units are higher than standard buy-to-let options for individual units, but the right mortgage provider should be able to offer you competitive rates.
You can only get a mortgage on a freehold property with certain mortgage providers who will have a strict set of criteria assessments. We recommend that you seek the help of a financial adviser or mortgage broker before making any financial decisions.
What Types Of Mortgages Are Available For A MUFB?
Multi-Unit mortgages are available on both interest-only and interest and capital repayment bases.
Interest and Capital Repayment mortgages are attractive for investors and landlords looking to generate more equity in the building over time instead of repaying the entire loan at the end of the mortgage term.
What Is The Criteria For Securing A Multi-Unit Freehold Block Mortgage?
Different lenders will have other eligibility criteria for multi-unit freehold block mortgages, but here are some general terms and factors that you will typically see:
- The maximum loan-to-value (LTV) is around 75% but can be up to 80%.
- Mortgages are available to individuals and limited companies so landlords and property owners can decide on their desired level of personal liability and, in many cases, use their Special Purpose Entity to make their investments far more tax efficient.
- Lenders are more likely to give this type of mortgage to experienced landlords rather than first-time buyers, but some mortgage lenders will consider those new to multi-unit freehold blocks.
- There might be restrictions on the number of units allowed within the freehold.
- The interest cover ratio (ICR) will likely be based on the expected rental value.
- Most providers will only provide loans to those aged 18 or over; some may insist that you are 21 or over. Upper age limits may also be imposed as senior owners can be seen as higher risk.
What Is The Criteria For Securing A Multi-Unit Freehold Block Mortgage?
When it comes to taking out a multi-unit freehold block mortgage, the affordability criteria are far more relaxed than a typical residential mortgage:
BUY TO LET OPTIONS
These tend to be normal residential houses, 2 to 3 bedrooms terrace, semi-detached, detached or flats.
They are houses that are suitable for the average renter and are sometimes known as vanilla buy to let properties.
A House of Multiple Occupancy (HMO) is a rented property occupied by at least three people who are not from one household or five or more people, forming two or more households.
This type of Buy To Let is a freehold block which offers multiple, separate or independent residential units.
This can be a variety of different types of property such as blocks of flats or houses converted into flats.
This is very similar to HMO’s and even are often referred to as non-licensable HMO’s.
They have many characteristics of a typical HMO but don’t require the licence, but they may still require planning permission from your local authority.
As the name describes, this is a commercial premises and it is when you let the property out to one or more businesses.
It’s often referred to as Commercial Landlord Mortgage, Business Buy To Let Mortgage or Commercial Investment Mortage.
OUR LOCATIONS
Thinking of buying a BMV property, but have a specific area in mind? To give you an understanding of just how broad your property choice is, here’s the areas where we most regularly buy BMV property…
Start your property journey today
Start your property journey today
EXAMPLES OF PROPERTY INVESTMENTS
Have we got your interest? Well, how do you know that we’re going to provide great deals? Just take a look at some of our recent sales in the area, they speak for themselves!
Want to see more of our deals? Check out our recent deals.
Buy Refurbish Rent Refinance
Scunthorpe, DN16
House, Semi-detached Freehold
25% BMV
Yield
8.3%
- Freehold
- Driveway
- Rear garden
- Close to local amenities and transport links
- Could achieve £700 – £750 pcm
- Vacant upon completion
Buy Refurbish Rent Refinance
Scunthorpe, DN16
House, Semi-detached Freehold
25% BMV
Yield
8.3%
- Freehold
- Driveway
- Rear garden
- Close to local amenities and transport links
- Could achieve £700 – £750 pcm
- Vacant upon completion
AirBnB
Bakewell, DE45
House, Terrace Freehold
22.1% BMV
Yield
15.2%
- Freehold
- Grade II listed
- £51,000 per annum gross rental
- £200 nightly average
- 70% predicted occupancy
- RICS £420,000 in current condition
AirBnB
Bakewell, DE45
House, Terrace Freehold
22.1% BMV
Yield
15.2%
- Freehold
- Grade II listed
- £51,000 per annum gross rental
- £200 nightly average
- 70% predicted occupancy
- RICS £420,000 in current condition
Refurb to Flip
Tadley, RG26
Bungalow, Detached Freehold
45% BMV
Exit Profit
20%
- Freehold
- Refurb opportunity
- RICS value £300,000
- Strong demand from owner occupier
- Great transport links
- 50 Miles from London
Refurb to Flip
Tadley, RG26
Bungalow, Detached Freehold
45% BMV
Exit Profit
20%
- Freehold
- Refurb opportunity
- RICS value £300,000
- Strong demand from owner occupier
- Great transport links
- 50 Miles from London
Buy To Let
Bradford, BD12 7DE
House, Terraced Freehold
24.3% BMV
Yield
10.8%
- Freehold
- 4.1 Miles to Bradford City Centre.
- 1.5 Miles to M606 & M62.
Buy To Let
Bradford, BD12 7DE
House, Terraced Freehold
24.3% BMV
Yield
10.8%
- Freehold
- 4.1 Miles to Bradford City Centre.
- 1.5 Miles to M606 & M62.
WHY SHOULD YOU INVEST WITH US?
We’ll find you the best deal, with the highest yield possible, tailored to your requirements.
We have years of experience in this industry and are part of a group of companies that regularly purchase properties for below market value, in which we can pass the discount on to yourself. We’ll look at every property we purchase, or even get an enquiry for, to determine if it will offer a high yield. If the answer is yes, we can pass the opportunity on to our investors.
We make it easy, doing all the research for you & finding the perfect property to slot into your portfolio.
WHY SHOULD YOU INVEST WITH US?
We’ll find you the best deal, with the highest yield possible, tailored to your requirements.
We have years of experience in this industry and are part of a group of companies that regularly purchase properties for below market value, in which we can pass the discount on to yourself. We’ll look at every property we purchase, or even get an enquiry for, to determine if it will offer a high yield. If the answer is yes, we can pass the opportunity on to our investors.
We make it easy, doing all the research for you & finding the perfect property to slot into your portfolio.