Title splitting a block of flats: how the value is created.

A block of flats held on a single freehold title is almost always worth less than the sum of its flats. That gap — the split premium — is one of the cleanest value-add plays in UK property, because you can create it with paperwork rather than a builder.

Why the block trades at a discount

A whole block on one title can only be bought by investors — and usually cash-rich or specialist-funded ones, because mainstream buy-to-let lenders won’t mortgage a multi-unit freehold. A small buyer pool means a lower price. Each individual flat, on its own leasehold title, can be bought by owner-occupiers, first-time buyers and small landlords with ordinary mortgages. Bigger market, better price. Six flats worth £215,000 each might sit inside a block you can buy for £900,000 — a £1.3m aggregate against a £1m block value.

How the split actually works

Your solicitor creates individual leasehold titles out of the freehold — typically on completion of the purchase, which is cheaper and cleaner than splitting later. Ask the valuer to put both figures in writing on day one: the block (investment) value and the aggregate of the individual flats. That evidence supports both the split and the refinance that follows.

The SDLT angle

Buying six or more dwellings in one transaction lets you pay non-residential SDLT rates instead of residential additional-property rates — often a five-figure saving on a block. Run your numbers through our SDLT calculator to see the difference.

Funding it: bridge, split, refinance

Because mainstream lenders avoid single-title blocks, the usual route is a bridging loan to buy (typically the lower of 90% of the price and 75% of the value), split the title and do any works, then refinance at around 75% of the new aggregate value. If you bought well, the refinance repays the bridge and returns most — sometimes all — of your cash, while you keep the block and its rent. The alternative exit is selling the flats individually and banking the premium as profit. Our bridging calculator shows what the bridge itself costs.

What to watch

Leases must be drawn properly (ground rent, service charge, repairing obligations) or the flats become hard to mortgage, which defeats the point. The refinance also has to pass the lender’s ICR stress test — on a big block the rent, not the value, can be what caps the loan. And valuers will want comparable evidence for the aggregate figure, so check real sold prices for similar flats nearby.