What is a multi-unit freehold block?
Key distinction
MUFB = one freehold title, multiple units. The freeholder controls the building fabric, insurance, and common areas — unlike a leasehold flat portfolio where each flat is a separate title.
MUFB mortgage — specialist financing
- High street buy-to-let lenders generally exclude MUFB properties — specialist lenders offer MUFB-specific products assessed on total rental income
- Maximum LTV typically 70-75%; a 25-30% deposit is required
- ICR assessed on total annual rent from all units at a stressed rate of 5.5-6%
- Many lenders impose minimum loan sizes of £150,000-£250,000
- Most products cover 2-20 units — larger blocks require commercial lending
SDLT on MUFB purchase
- Multiple dwellings relief abolished from 1 June 2024 — SDLT is now calculated on the total purchase price
- The 3% additional dwellings surcharge applies if the buyer already owns residential property
- Where the block has a commercial element (e.g., a ground-floor shop), non-residential SDLT rates may apply
- Always take specialist SDLT advice before exchange on any MUFB transaction
Fire safety obligations
- Written fire risk assessment of all common parts — mandatory for blocks with shared domestic premises
- Monthly checks of communal fire doors; annual checks of flat entrance fire doors in blocks of 11 metres or more
- Buildings of 18 metres or more are Higher-Risk Buildings regulated by the Building Safety Regulator
- Smoke and CO alarms required in each letting unit; emergency lighting in common areas
Management obligations as freeholder
- Structural repairs (roof, external walls, foundations) are the freeholder's responsibility
- Common area maintenance cannot be passed to AST tenants via a service charge (unlike long leaseholders)
- Single buildings insurance policy required for the entire block
- HMO licensing applies per unit where a unit is let to three or more unrelated people sharing facilities