Flying Freehold Property Mortgages Over 55s

The legal complication of flying freehold arises because freehold law was historically designed around land in two dimensions rather than three. Where part of a freehold property extends over or under another freehold property, the maintenance responsibilities between the two are less clear than in a standard title. Without a deed of covenant or positive covenant arrangement, neither freeholder is straightforwardly required to maintain their part of the shared structure, which creates future risk that lenders want addressed.

Indemnity insurance is the most common solution for flying freehold cases. The insurance protects the mortgage lender (and the owner) against financial loss from a dispute arising from the title arrangement. It is usually purchased as a one-off premium at the time of the mortgage, and the cover continues in perpetuity. Most standard conveyancers can arrange this type of indemnity insurance.

Deed of covenant solutions are more robust where they can be arranged. A deed of covenant binds both owners to maintain their parts of the shared structure and is registered against both titles. Where both owners are willing, this can resolve the underlying legal issue rather than just insuring against it. In practice, many flying freehold cases proceed on indemnity insurance alone because negotiating a covenant with all affected parties is complex.

Lender appetite for flying freehold varies. Some mainstream lenders accept flying freehold subject to satisfactory indemnity insurance and a clean conveyancing report. Others require the flying freehold to affect only a limited percentage of the property. Specialist lenders will typically consider cases that mainstream lenders have declined, often with the same indemnity insurance solution.

For equity release on flying freehold properties, the considerations are similar. Lifetime mortgage lenders generally accept flying freehold subject to indemnity insurance, and the specialist equity release lender pool is usually broader than the specialist standard residential pool on these cases.

The Process

Your first conversation is a relaxed discussion about the property, the title arrangement, and your circumstances. There is no cost or obligation.

We may ask for the title deeds, any existing indemnity insurance documentation, and any covenant arrangements already in place. We research the market and come back with a written recommendation.

Every flying freehold case is different. A historic terrace with a small under-passage is a different case from a converted farmyard with substantial overlapping boundaries, and our recommendations reflect those differences.