Selling a house with two flats but one title in the UK can be complex. This guide explains the legal, financial, and practical considerations involved, helping you decide whether to split the title, create leases, or sell as-is - and how to achieve the best outcome for your situation.
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Navigating the Split: Unlocking the Value in Your One-Title, Two-Flat Property
What's Involved?CostsSell to an Investor?FAQ'sSelling a freehold house split into flats can be complex, particularly when the property is still held under a single legal title. In such cases, the building may contain two or more self-contained flats, yet remain one undivided freehold entity, making it challenging to sell individual units in the traditional manner. This situation often arises when a property has been converted into flats without formalising the legal separation through lease creation and title registration.
This comprehensive guide explores how to sell a house with two flats but one title, covering the key legal, financial, and procedural considerations. Whether you're an accidental landlord, property investor, or homeowner looking to maximise your return, we break down the risks, benefits, and practical steps required to navigate the process. We’ll also address commonly asked questions, such as whether it’s legal to sell flats without leases, how to create leases for flats, and whether you should sell the entire property or split it into separate titles first.
Our aim is to equip you with the knowledge to make informed decisions, avoid costly mistakes, and achieve a successful sale - whether to a private buyer, investor, or developer.
In layman's terms: If you want to sell the flats individually, yes - you usually need to create separate leases first. This is because lenders and buyers expect each flat to have its own legal title, which is typically leasehold if the building is freehold. Without separate leases, the property is legally just one house, even if it's physically divided. This means buyers can’t get a mortgage on just one flat, and the sale process becomes much more difficult. Most estate agents and conveyancers will advise that splitting the title into individual leaseholds is essential to attract buyers and achieve the best price.
In technical terms: A single freehold title cannot be subdivided into separately saleable units unless individual leasehold titles are created. Under English property law, the Land Registry does not recognise part-ownership of a freehold in this context without the creation of long leases. The process of creating these leases involves drawing up formal documents that define each flat as a separate legal interest, usually on terms of 99 or 125 years. Once the leases are granted and registered, each flat can be sold separately as its own leasehold title, while the original freehold is retained or disposed of as a separate asset.
You can sell one flat informally (e.g., with a deed of trust, declaration of trust, or co-ownership agreement), but it is fraught with legal risk. These informal arrangements might allow you to transfer beneficial ownership of a specific flat, but the legal title at HM Land Registry would still show the entire property as a single freehold. This means the buyer is not acquiring a standalone, mortgageable asset.
In practice, very few buyers will accept this arrangement unless they are experienced investors or purchasing with cash and legal advice. Mortgage lenders will not lend against a property interest that lacks a registered title, so this route is almost entirely closed to mortgaged buyers. Additionally, should a dispute arise, enforcing rights over shared spaces or responsibilities could become complex and contentious. For these reasons, selling one flat without splitting the title is not a common or recommended practice.
Technically, yes - but it’s not practical or advisable in the vast majority of cases. Selling flats without leases is legally possible under contract law, for example through a declaration of trust, shared ownership agreements, or assigning beneficial interests. However, doing so creates a host of legal, financial, and administrative challenges. These arrangements typically do not confer a recognised title at HM Land Registry and offer no clear protection or enforceable rights for either party in the long term.
Buyers in this scenario would not be purchasing a registered leasehold title and would be unable to obtain a mortgage. Shared ownership structures are often complicated to draft and enforce, and can give rise to disputes over boundaries, maintenance responsibilities, service charges, and access to communal areas. They also provide no easy route for resale. Most solicitors will strongly advise against this path due to the uncertainty and risk it creates for both seller and buyer. For a clean and legally sound transaction, creating formal leases is the far more practical route.
Instruct a solicitor to draft lease agreements: These leases must clearly define the demised premises, outline the rights and obligations of each leaseholder, and include details such as the lease term, ground rent (if any), and service charge arrangements. The leases must also comply with legal requirements set by HM Land Registry.
Hire a surveyor to define boundaries and floor plans: A professional surveyor will create scaled floor plans showing each flat's boundaries, including communal areas, external access, and any shared facilities. These plans are often submitted as part of the lease documentation and are essential for registration.
Create leasehold titles and register them with HM Land Registry: Once the leases are finalised and signed, they must be submitted to the Land Registry to create separate leasehold titles. Each flat will then appear as its own legal property, allowing them to be sold, mortgaged, or transferred independently.
Decide who holds the freehold: You can choose to retain the freehold yourself, transfer it to one of the flat buyers (often the last one to complete), or set up a management company to which the freehold is transferred and jointly owned by the leaseholders. Your decision affects long-term management, control, and potential revenue from ground rents or future lease extensions.
Appoint a solicitor with experience in leasehold creation: This is a specialist area of conveyancing, so it’s important to choose a solicitor who understands how to structure leases that comply with legal and mortgage-lender requirements. A good solicitor will also guide you on how to handle shared areas, responsibilities, and lease terms that protect your interests while appealing to buyers.
Define the lease length (typically 99 or 125 years): A longer lease term makes the flat more valuable and easier to sell. Many buyers and lenders prefer leases with at least 90–100 years remaining. Leases below 80 years may be seen as short and could reduce sale value or deter mortgage lenders.
Set out service charge arrangements, repair obligations, and ground rent (if applicable): Your lease must clearly define who is responsible for maintaining the building and how costs are shared. This includes communal areas such as stairwells and roofs. Many modern leases set ground rent at a peppercorn or nil to avoid complications, especially in light of recent leasehold reform legislation.
Register each lease with Land Registry: After the leases are granted and signed, they must be registered with HM Land Registry. This formalises each lease as a separate title, allowing it to be independently sold or mortgaged. You’ll also need to pay a registration fee for each new leasehold title.
This is a red flag and could significantly delay or derail a sale if not resolved in advance. You may need:
Retrospective planning permission from the local council if the conversion from a single dwelling into flats was done without formal approval. This process can be time-consuming and may require adjustments to the property to meet current planning standards.
Regularisation certificates for building regulations compliance, which demonstrate that the works comply with building safety standards. A local authority building control team or an approved inspector must inspect the works to issue this certificate.
Lenders are often unwilling to fund purchases of non-compliant properties, as they pose significant legal and safety risks. Buyers may walk away if approvals aren’t in place, or only cash buyers may consider proceeding. Rectifying these issues early can make your property more marketable and attract a broader range of potential buyers, including those using mortgage finance.
Generally, no. Mortgage lenders require a legally recognised leasehold interest before they will agree to lend. This is because the lease defines the borrower's legal right to occupy the flat and includes enforceable terms and protections that the lender can rely on. A flat without a formal lease lacks a distinct legal identity, making it impossible for a lender to secure a charge against that specific unit.
Without a registered leasehold title, the flat is considered part of the overall freehold and cannot be individually mortgaged. Even if a buyer wanted to proceed, most mainstream lenders would refuse to finance the purchase, significantly limiting the buyer pool to cash buyers or specialist investors. Therefore, if you intend to sell to an open market audience, creating and registering a proper lease is essential to make the flat mortgageable and attract conventional buyers.
If no leases exist, yes - only cash buyers are likely to proceed. This is because most mortgage lenders will not finance the purchase of an individual flat unless it has its own leasehold title. Cash buyers, often investors or developers, are sometimes willing to purchase such properties at a discount and take on the responsibility of creating the leases themselves. However, this limits your market significantly.
By creating and registering proper leases before marketing the property, you dramatically increase its appeal. You can attract a broader pool of potential buyers, including owner-occupiers and those needing mortgage finance. This added competition can help achieve a higher sale price and reduce the time it takes to sell.
Splitting and selling flats separately usually yields a higher total price, as each flat can be marketed individually, potentially attracting more competitive offers and allowing buyers to purchase with standard residential mortgages. However, this approach comes with higher legal, administrative, and surveying costs, as you will need to create leases, register titles, and potentially obtain planning permission and building regulation certificates. It may also extend your timeline due to the additional work involved.
Selling as one unit is quicker, simpler, and may appeal to investors or developers looking for value-add opportunities. However, it may fetch a lower price overall because buyers will factor in the costs and effort of creating leases themselves. Ultimately, the best route depends on your goals - maximising value or simplifying the transaction.
Costs vary but expect:
Solicitor’s fees: £2,000–£5,000. This covers the legal drafting of two new leases, guidance on structuring lease terms, and overseeing the registration process. Fees may be higher for complex arrangements or if the property has planning or legal irregularities.
Surveyor fees: £500–£1,500. You’ll need scaled floor plans and possibly valuation advice if setting ground rents or calculating apportionments for service charges. This cost may rise if the surveyor must also assist with retrospective planning or building regulation matters.
Land Registry fees: ~£45–£135 per lease. Registration fees depend on the value of the leasehold interest being created. Each flat will require its own application and fee.
Possible planning or compliance costs: If the conversion was unauthorised, obtaining retrospective planning permission and regularisation certificates may add £1,000–£5,000+, depending on the local authority’s requirements and whether remedial work is needed. Additional costs may include fire safety upgrades, electrical certification, and energy performance assessments.
You may incur:
Capital Gains Tax (CGT) if it’s not your primary residence. When you sell part of your property as individual flats, each sale may trigger a CGT liability on the gain attributable to that portion. CGT rates and exemptions vary depending on whether you are an individual, company, or trustee, and whether the property has been your main home.
Higher Stamp Duty Land Tax (SDLT) for buyers. If buyers are purchasing more than one dwelling (e.g., both flats together), Multiple Dwellings Relief (MDR) may apply. However, individual buyers may still face higher rates, particularly for second homes or investment properties.
Potential VAT if you’re a developer or property trader and have opted to tax the property. In some cases, the sale of newly converted residential units may be zero-rated for VAT, while others may be exempt or standard-rated depending on the circumstances and use of the property. It’s important to get professional tax advice to avoid unexpected liabilities.
Yes, unless the property is your principal private residence and qualifies for Private Residence Relief, which can exempt the sale from Capital Gains Tax (CGT). If you have lived in the property throughout your period of ownership, and it has not been let out or used for business purposes, you may not owe any CGT.
However, if the property has been used as an investment, let to tenants, or held for development, CGT will apply to any profit made on the sale of each flat. In this case, each flat sale is treated as a separate disposal for tax purposes, and you may need to calculate the gain attributable to each one. Allowable deductions include legal fees, estate agent fees, and improvement costs. You may also be able to use your annual CGT allowance, currently £3,000 for individuals (subject to change), to offset part of the gain. Specialist tax advice is recommended to ensure full compliance and accurate reporting.
It depends on your priorities, timeline, and willingness to invest in the preparation process:
Sell whole if you want a faster, lower-hassle transaction. This route is ideal if you're targeting investors or cash buyers who are experienced in creating leases themselves. It minimises legal and administrative work, but usually results in a lower total sale price, as buyers will factor in the work and cost involved in splitting the title and ensuring compliance.
Split first if you’re aiming to maximise the sale price and attract a wider pool of buyers, including mortgage-backed purchasers. This approach involves more upfront effort and cost - such as drafting leases, updating compliance certificates, and registering new titles - but it can significantly increase the overall value and marketability of the flats. If you have time and are prepared to wait, this is often the more profitable option.
Obtain or regularise planning and building consents: Ensure that the conversion from a house to flats was properly approved by your local planning authority and meets building regulations. If not, you may need retrospective planning permission or regularisation certificates.
Create leases and clarify legal boundaries: Draft legally compliant leases for each flat, clearly defining the internal demised space, shared access areas, and responsibilities for maintenance. Accurate boundary plans from a qualified surveyor are essential.
Ensure compliance with fire safety: Install fire doors, smoke alarms, and appropriate fire separation between units. Ensure that all escape routes meet the current safety standards. A fire risk assessment may also be advisable, particularly in HMOs (Houses in Multiple Occupation).
Provide energy performance certificates (EPCs) for each flat: Each unit must have its own EPC showing its energy efficiency rating. These are legally required before marketing the property and can influence buyer decisions.
Yes. Some investors specialise in buying such properties and are prepared to handle the legal and administrative work involved in splitting the title and creating leases. These buyers are typically experienced in dealing with legal complexities, planning compliance, and lease structuring, which allows them to take on properties that may be unsuitable for conventional buyers. However, because they take on additional risk and effort, they often expect a discounted purchase price to reflect the time and costs they will incur in regularising the title and maximising the property's future value.
Cash investors: Particularly those looking for below-market opportunities where they can add value by regularising legal title and later selling at a premium.
Property developers: Buyers who may be interested in carrying out additional works, extending the property, or converting it further before resale.
Experienced landlords: Investors who already manage similar properties and are comfortable with the risks and processes involved in lease creation.
Buyers with legal teams prepared to manage lease creation: These buyers may be small-scale developers or professionals who can handle the required paperwork in-house.
Auction buyers: Property auctions are a popular route for selling houses with legal or planning complications, including those split into flats but held on one title. Auctions attract experienced cash buyers who are comfortable with short completion times and the responsibility of resolving title issues themselves.
Expect 2–6 months, depending on several factors that can either expedite or delay the process:
Planning or building regulation issues: If the property lacks proper permissions or certifications, obtaining retrospective approvals can add significant time - sometimes months - especially if remedial works are required.
Solicitor workloads: The availability and responsiveness of your solicitor and any buyers’ solicitors will affect progress. Delays are common during busy periods or if your legal team is unfamiliar with lease creation.
Lease drafting complexity: If the flats have unusual layouts, shared amenities, or if you are setting up a management company or dealing with existing tenancies, the lease drafting stage can become more involved.
Buyer type and financing: Selling to a cash buyer or investor may speed things up. Selling to individual buyers using mortgages can slow the process if lenders raise legal queries.
Route of sale: Selling through an auction may lead to a quicker exchange, but post-auction completion still depends on legal readiness, especially where title issues are involved.
You’ll become the freeholder, responsible for:
Maintaining common areas: This includes shared hallways, entrances, roofs, gardens, and any other parts of the property not demised to individual leaseholders. You must ensure these areas are kept in good repair and safe condition.
Managing service charges and insurance: You will be expected to collect contributions from leaseholders to cover communal expenses, such as buildings insurance, maintenance, and repairs. Transparent accounting and regular communication with leaseholders are essential.
Enforcing lease terms: As the freeholder, you have the legal duty to enforce the terms of the lease. This could involve addressing breaches, such as unauthorised alterations, non-payment of service charges, or subletting in violation of the lease. You must act fairly and in accordance with property law and leasehold regulations.
You may also have to deal with disputes, compliance issues, and administrative tasks such as arranging annual budgets or major works under Section 20 of the Landlord and Tenant Act 1985. For these reasons, some freeholders appoint managing agents to handle day-to-day responsibilities.
Yes, if you plan to sell leasehold flats. Setting up a residents’ management company (RMC) or a right to manage (RTM) company is often viewed favourably by buyers and their solicitors, as it formalises the management structure of the building. This company can take ownership of the freehold or oversee the day-to-day responsibilities of maintaining communal areas, collecting service charges, and arranging insurance. It ensures that all leaseholders have a say in the running of the building and reduces reliance on the original freeholder. Buyers feel more confident purchasing a flat in a well-managed block, and lenders may also see this as a sign of long-term sustainability. If you're preparing to sell, forming such a company in advance can streamline the conveyancing process and make the flats more appealing and mortgageable.
You can:
Retain it and manage the building: This allows you to remain in control of maintenance decisions, ground rent (if any), and future lease extensions. However, you’ll be responsible for ongoing management and legal obligations, which can be time-consuming.
Transfer it to the flat owners jointly: This is typically done by forming a residents’ management company where each leaseholder owns a share. It promotes shared responsibility and can be appealing to buyers looking for long-term control of their home.
Sell it separately to an investor: Some investors are interested in buying freeholds as income-generating assets, especially if the leases contain ground rent provisions or short lease lengths. This option can release capital for you without the burden of ongoing management.
Alternatively, if you’re struggling to sell on the open market or want a faster, less complicated sale, you can offer the property - including the freehold and both flats - for sale at auction. This route often attracts cash buyers and property professionals comfortable with legal irregularities, and may be suitable if you wish to sell the entire asset as a single lot.
Yes. It's common to:
Sell the freehold along with the final flat: This simplifies the transaction by packaging the final leasehold interest with the remaining freehold. The buyer of the final flat then becomes the freeholder and takes on the responsibilities of managing the building and lease arrangements, unless a management company is in place.
Transfer it to a management company owned jointly by leaseholders: This is often done when setting up an RMC (Residents’ Management Company). Each leaseholder becomes a shareholder or member of the company, giving them shared control over the building's management and long-term decisions. This arrangement is often preferred by lenders and buyers because it fosters transparency, fairness, and good governance.
In some cases, sellers also consider offering the freehold as a separate lot at auction, especially if they wish to retain the freehold initially but later release its value. This can be attractive to investors interested in ground rent income or lease extensions.
If the flats were converted without approval, you may need retrospective permission. This depends on whether planning permission was required at the time of conversion and whether building control sign-off was obtained. In many cases, converting a single dwelling into multiple flats constitutes a material change of use, which requires planning permission. If this was not obtained, you should speak with your local planning authority to assess your options.
If the conversion took place more than four years ago and has been continuously used as separate flats without enforcement action, you may be able to apply for a Certificate of Lawfulness. This certificate legally confirms that the use is lawful due to the passage of time. However, this does not exempt the property from needing building regulation approval. If building control approval was not secured at the time of works, you may also need to apply for retrospective building regulation approval or a regularisation certificate, which involves inspection and potentially remedial works to meet safety standards.
Securing the correct permissions and certifications is vital, as failure to do so can affect your ability to sell, reduce buyer confidence, and make it difficult or impossible for buyers to obtain a mortgage.
Title deeds: These confirm legal ownership of the property and will be required by both your solicitor and any prospective buyers. They must reflect any updated information once leases are created.
EPCs for each flat: An Energy Performance Certificate is a legal requirement and provides buyers with the energy efficiency rating of each flat. Each self-contained unit must have its own EPC.
Gas safety and electrical certificates: Valid certification must be provided for any gas appliances or electrical installations in the flats. This is especially important if the property has been let out or contains multiple tenancies.
Planning/building control approvals: These demonstrate that the conversion work was authorised and compliant with regulations. This includes planning permission, building regulations approval, or any retrospective approvals where applicable.
Draft leases: If you are selling the flats as leasehold units, you will need professionally drafted leases outlining the terms of ownership, responsibilities, and rights of each flat owner. These should be reviewed by your solicitor and ready for registration with HM Land Registry.
Fire safety documentation: Buyers will expect to see evidence of compliance with fire regulations, particularly if the flats share communal areas. This could include a fire risk assessment, installation certificates for alarms, and documentation for fire doors or emergency lighting.
Management arrangements (if applicable): If a Residents’ Management Company (RMC) has been formed or a managing agent appointed, provide documentation showing roles, responsibilities, and any service charge budgets or accounts.
Yes. Most councils require planning permission for converting a house into flats, as it typically constitutes a material change of use. Even if no external alterations were made, the act of dividing a single dwelling into multiple self-contained units can have significant implications for local infrastructure, housing policy, and building safety standards. Failing to obtain the necessary permission may result in enforcement action or difficulty selling the property.
It's crucial to check your local authority’s rules - each council has its own policies and thresholds for what constitutes a 'conversion' that requires consent. In some areas, Article 4 Directions may restrict permitted development rights, making planning permission mandatory even for seemingly minor changes. Consulting a planning consultant or architectural professional early on can help assess compliance and prepare any necessary retrospective applications if required.
You must ensure:
Fire doors are fitted: These should be FD30-rated doors at a minimum, capable of withstanding fire for 30 minutes. They should be installed at entrances to each flat and any communal areas.
Smoke alarms are installed: Mains-wired interlinked smoke alarms should be installed in all units and common spaces, with heat detectors in kitchens. Battery-operated alarms may not meet the requirements for mortgaged sales.
Fire separation between units: Each flat must be compartmentalised with fire-resistant walls, floors, and ceilings. This prevents fire from spreading between units and protects escape routes.
Escape routes are compliant: All flats must have a clear, safe means of escape. This includes unobstructed access to exit points and signage in communal areas if required. Emergency lighting may be necessary depending on layout and usage.
Without these measures, the property may not meet building regulations or fire safety legislation, such as the Regulatory Reform (Fire Safety) Order 2005. Non-compliance can result in enforcement notices, fines, or refusal of sale by mortgage lenders. Buyers may also walk away if fire safety is not adequately documented or rectified.
Selling a house converted into flats with only one title is a nuanced process. Whether you decide to sell as-is, create leases, or engage with investors, understanding your legal and financial obligations is essential. Always consult with solicitors and property professionals experienced in this type of sale.
1. Can I legally sell one flat if the building is still on a single title?
Technically yes, but it's extremely difficult. Without a separate lease and title, the flat cannot be independently sold on the open market or mortgaged. Most buyers and solicitors will not proceed unless the title is properly split.
2. Do I need planning permission to sell the flats separately?
Not specifically to sell them, but you do need planning permission for the conversion into flats. If the conversion was unauthorised, you may need retrospective consent to satisfy legal requirements and buyer or lender expectations.
3. How long does it take to create leases and split the title?
The process usually takes 2 to 6 months but can take longer if planning permission or building regulation approval is required, or if your legal team is not experienced in lease creation.
4. What if the property is non-compliant with fire or building regulations?
This will likely delay or block a sale, especially to mortgaged buyers. You should address compliance issues before marketing the property. Retrospective approval and fire safety upgrades may be necessary.
5. Will creating leases increase the value of the property?
Yes. Selling two flats individually often results in a higher combined sale price than selling as one house—though legal and professional fees must be factored in.
6. Can I sell at auction if the property isn’t split into leases?
Yes. Auctions are a practical route for selling properties with complex legal structures or non-standard features. However, the price may reflect the risk and effort required by the buyer.
7. Are buyers able to get a mortgage on a flat without a lease?
No. Mortgage lenders require a registered leasehold title. Flats without leases are typically only suitable for cash buyers or investors.
8. What costs should I expect when splitting a house into leasehold flats?
Typical costs include solicitor fees (£2,000–£5,000), surveyor fees (£500–£1,500), Land Registry charges, and potentially planning and building regulation compliance costs.
9. What are my responsibilities if I keep the freehold after selling the flats?
You’ll be responsible for managing the building, maintaining shared areas, collecting service charges, arranging insurance, and enforcing lease terms—unless you appoint a managing agent or transfer the freehold to a management company.
10. Should I set up a management company before I sell?
Yes. It improves buyer confidence, helps with the smooth operation of the building post-sale, and is often favoured by mortgage lenders and conveyancers.
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