Multi Unit Buy to Let

Mortgage Broker Sussex

As the name suggests, a multi-unit freehold block (or MUFB ) is a property that contains two or more separate and independent residential units, which are held on a single title and no one unit is subject to a lease.  

The most common MUFBs are purpose-built blocks of flats and houses that have been converted into flats. Each flat or apartment will be let out on a separate Assured Shorthold Tenancy (AST) agreement. Whilst it is usual for the property to have common areas shared by all tenants – think gardens and hallways – each unit will have its own entrance and private space to which no other resident in the block has access.

Why do landlords and property investors like multi-units?

Multi-units are popular with landlords because they typically produce slightly higher yields than standard buy-to-let properties. Also, with multiple units on the same site, they are more convenient to manage.

How easy is it to finance a multi-unit?

Whether buying personally or via a limited company, for an experienced landlord getting a mortgage for a multi-unit is fairly straightforward. There are fewer options for investors with little or no experience, ex-pats and those looking to use SIPPS, SAPPS and trusts, but it’s not impossible for those with good credit profiles. If the borrower is using a limited company – SPV or trading – there will be no upper age limits and because most lenders tend to be more specialist providers, they won’t require the landlord to have an income in addition to the rent.

What are rates and terms like?

For the most part, expect rates to be a bit but not massively higher than you would expect to find for standard buy-to-let property. Depending on the lender the finance will be either a buy-to-let or commercial mortgage – it doesn’t really matter. As usual, the larger your deposit, the better the rate you can expect to be offered, but it is possible to go up to 80% LTV on interest-only terms.

It’s worth noting that the type of multi-unit and the location will affect what’s achievable and that’s where Mortgage Evolution’s extensive knowledge of the different lenders comes into play. For example, we know who will lend on multi-units above shops and offices, non-standard construction MUFBs, and where only part of the multi-unit is available, i.e. where some units within the block have been sold off.  

Obviously, multi-units within easy reach of shops and services are more likely to appeal to lenders but the pandemic has changed people’s living aspirations and lenders are very keen to keep up.

Multi-Unit buy to let specialist

Because there are so many different factors in play, the best way to find out if your multi-unit can be financed is to get in touch for a quote. Remember, we can help with purchases and remortgages.

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