The most common form of title splitting is when an individual buys a single property or plot and then divides it up. For example, if you refurbish a property and split it into two or more homes, you can increase your rental income and increase your portfolio. If you did this you would need to record each separate residence with Land Registry.
Altering a house into flats
A popular type of title split is to convert houses into flats. Property investors sometimes do this so that the property can be sold for profit once there are separate leases for each of the flats. Another option available is once the property has been split, you can get buy-to-let mortgage finance on the individual flats.
What happens to the freehold of the property?
Many property developers seek advice from a solicitor when it comes to the freehold of the property. A common scenario is for the property investor to retain the freehold of the building and grant leases for each residential unit.
As the freeholder, you would then collect rent and would need to act as a management company charging maintenance and repairs. You would also be liable for maintenance and repair of communal areas, the building’s exterior and buildings insurance.
How to find a title split property
Do your research into this, speak to your local council and planning officers to find a suitable property. You should also talk to a surveyor and prepare an application for building work. This will ensure that your figures are correct. We would also advise contacting a solicitor who has experience of title splits, for the legal side of things.
Search the internet for potential title split properties, there might be a plot of land that could be developed or a large property that could be divided.
When the time comes to selling one of the properties, you will have the title deeds in place, making the process much easier. This will also help with cash flow to invest in your next property deal.
At Resolve, we work with a number of solicitors who are experts in the legal work required to create new property titles. This maybe when a property is converted into flats or a single unit is developed into a multi-unit property. This could be the sale of existing land attached to a property with the intention of it being developed or assist with the purchasing of a property with the intention of the original title being split.
“Engaging with a legal professional upfront is key,” they tell often us as this will ensure that the developer avoids issues during the process, either legal or financial.
If you would like more advice about title splitting, then please get in touch and we can discuss your circumstances in more detail.
*Please note: The Financial Conduct Authority does not regulate Buy to Let properties.