Securing a mortgage for a flat and the freehold of the building, FTB transaction

Securing a mortgage for a flat and the freehold of the building in FTB transaction

Article by Heather Greatorex Sales Team Leader / Mortgage Adviser

What was the situation?

I was approached by my client who was looking to purchase their first home. The property was a lovely flat, situated within a 3-storey house converted into flats. The property was a leasehold, however the transaction meant that the clients would be purchasing the freehold of the block as part of the transaction.

The clients had both regular and self-employed income available to repay the mortgage.

What was the issue?

A significant complexity with this case was that many lenders would not consider the application because the purchase of the property included the freehold of the block. Lenders see this as an issue as it involves legal responsibilities for the freehold that are deemed too complex. Additionally, the clients planned to own the freehold in their personal name and not a limited company which also complicated matters (lenders that are typically OK with these scenarios prefer the freehold to be held in a limited company).

What was the process?

Following conversations with different lenders, one in particular advised that they could consider the application subject to surveyors comments.

Unfortunately, following the underwriting review the lender declined the application due to the freehold being purchased as it would then change the property class to a freehold flat. However, this matter had been previously agreed and fitted within the banks policy. I pushed back on this challenge and the application was escalated to higher management. Upon review they accepted the application as it did fit within policy, and the case went to offer.

What was the solution?

Following confirmation that the lender was happy to proceed with the loan upon client’s purchase, the client completed on the purchase.

The clients were delighted that they were able to complete on their dream property. The whole situation was stressful, however they felt that they would not have been able to buy this property without our help and lender connections.


At LDN Finance we’re here to help you find a solution – no matter how complex your circumstances. Our expert brokers have extensive experience in providing creative solutions to secure large loans for our clients.

We work closely with our trusted network of private banks and both high street and specialist lenders to arrange bespoke mortgage arrangements to suit your circumstances at competitive, market-leading rates.

Get in touch with us to organise an initial consultation.

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Excellent and outstanding professional service from start to finish. From offering as many options as possible, to explaining to me very quickly what the benefits are and what I should really be thinking about moving forward. Thoroughly recommend.

Mr. M

July 2021

5 Stars! The LDN team supported us purchasing our family home, without their support and as an expat it would have been very difficult to obtain our new home in the UK. I would totally recommended them.

Mr. S

August 2021

Johnny Martin held our hands through the entire process calmly and professionally. Brilliant service, efficient and swift in response to everything. He made the entire journey uncomplicated even when the bank made it complicated. Highly recommended.

Mr. H

July 2021

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