Title Splitting Property in the UK...

Joe asked the question: "in layman's terms what is a title split and how would you go about it?"

Here is my reply:

Hi Joe,

Imagine a property that has been historically extended and developed to create 5 self contained flats.

The flats have a higher yield that a single property so the developer was very happy, but it is very hard to finance or re-finance.

The landlord developer has now decided that he wants to sell.

He puts in with an agent, who places it on rightmove where it sits for 6 months at £450k attracting a few offers but most are too low because they are cash offered by bargain hunters or fall through due to lack of lending on freehold flats.

You however see this block and realise that if leases are created on the flats then the entire property when split is worth substantially more (23% - 32% more) and so you have a chat with a solicitor about the process.

You know that the first conveyance to exchange/ option/ buy costs £1k, you can create new 125 years leases for £1k each and the resale of each flat costs £800 per flat, then sale of the freehold costs £800, so legals just squeeze into £12k
You offer to buy the property at the full asking price but want 6 months between exchange and completion. You can exchange on a 10% remains due basis, ie not payable until completion.

During this 6 month period you split title and sell the flats individually for 110k each, bringing in 550k.
You also sell the freehold for £8k, going some way to covering your legal bill.
Stamp duty will be mitigated by including rights to sell the pieces individually and offset against the purchase price, thereby avoiding double taxation and negating the need to pay stamp duty on the entire purchase price.

You make £96k profit less estate agent resale fees assume generous 2%+ vat = £13.2k
Net profit = £82.8k less sundries and tax

Vendor very happy with getting asking price, flat buyers happy, you're happy.

Of course there are risks to this which can be mitigated by using options instead of exchange if the vendor will allow it and by exchanging in an spv rather than personally.
There are other methods and many ways that this can be done, including refinancing as an exit instead of selling.
Bear in mind lenders exposure they will usually only lend on 1 or 2 per block and wont like you owning more than 1.

Researching prices and getting several surveyors/ agents opinions on resale prices with 125 year leases and reasonable service charge and ground rent is vital.
Check planning permission was approved and building regs are compliant or you will need to start spending real money on the property itself rather than just on the paperwork.

That is one type of "Title Splitting" but really it is "Leasehold Title Creation".

Pure Title Splitting is a multiple unit, usually mixed use site, for example a house and two cottages. Again the site has a small demand when offered for sale as 1 package but genuinely split the title into 3 parts and they can be sold individually, WHOLESALE TO RETAIL.

 I hope that helps,


PS: You can download our process flowchart for Title Splitting (TS) and Leasehold Title Creation (TC) Free of Charge here:

CALL ME ADRIAN HIBBERT on 07966 871854 to arrange for an  Introductory Property Workshop...