You’re running into a very common issue: a “freehold house arranged as two self-contained flats” sits outside what many residential lenders are set up to accept, even when the borrowing is small.
The good news is your numbers are strong. On a £145,000 purchase with £110,000 savings, you’re only looking to borrow around £35,000 (roughly 24% LTV). The difficulty is the legal setup, not the affordability.
Why lenders can be cautious with this type of property
From a lender’s point of view, there are a few risks:
- Title risk: if it’s one freehold title but physically two dwellings, the lender wants clarity on rights, responsibilities, and marketability.
- Resale risk: if they had to repossess, selling a “house split into two flats” can be harder than selling a standard house or a standard leasehold flat.
- Security risk: without proper leases in place, it can be unclear who is responsible for maintenance, insurance, access, and enforcement.
That’s why you’re getting pushback, even at a low loan-to-value.
First thing to clarify with your solicitor
Before you go lender-shopping, you need to know how the property is recognised legally.
1) Planning and building regulation position
Ask whether it has the correct consent to be used as two self-contained flats. If it’s been converted informally, that will restrict lender options further.
2) Title structure
Is it:
- one freehold title only, with no long leases; or
- a freehold title where long leases already exist; or
- two leasehold titles plus the freehold (common in “share of freehold” setups)
That answer dictates which lenders and products are realistic.
The routes that usually work
Option A: Buy it as a single dwelling (if possible)
If the property can be classed as a single house (even if laid out like two units) and you and your daughter will occupy it as one family household, some lenders may consider it more like a standard residential purchase.
This is very case-by-case and depends on how self-contained the flats are and what the valuer reports.
Option B: Create leases and “regularise” the structure (often best for mortgageability)
If the building is properly split into two flats, the most mortgage-friendly end state is usually:
- grant two long leases (often 125+ years)
- ensure clear rights for access, repairs, insurance, and services
- you own the freehold and the two leasehold interests (or a clean share-of-freehold structure)
Once that’s in place, you’re usually dealing with standard “leasehold flat” lending rather than niche freehold-split lending.
The catch is timing: you can’t always do this before purchase unless the seller is willing, and it involves legal costs.
Option C: Short-term finance, then remortgage once leases are in place
If you need to complete quickly and the title needs work, bridging can sometimes be used to buy first, then you refinance onto a standard mortgage once the legal structure is tidied up.
This is generally a last resort given cost, but it can be the practical route where the property is right and your borrowing need is small.
Option D: Specialist lenders who will lend on the “as is” setup
There are lenders who will look at non-standard title arrangements, particularly at low LTV. Rates and fees may not be as sharp as mainstream lenders, but with £35,000 borrowing the overall cost impact can be manageable.
A very important practical point: “not renting it out”
Your intent helps from a risk perspective, but it doesn’t automatically make lenders more comfortable. Some lenders actually find pure family occupancy harder to categorise when the property is legally two dwellings.
The cleaner you can make the legal structure, the easier the underwriting becomes.
Where to start looking
In order of usefulness:
- Solicitor first — confirm planning status and title structure, and get a rough cost/timeline to create leases if needed.
- Broker next — once the legal position is clear, target the right lender type immediately (standard residential vs specialist vs bridge-and-refinance).
- Valuation narrative — for borderline cases, the valuer’s description often decides the outcome, so packaging matters.
Please call 023 8235 2300 and one of our consultants will be able to advise you on your situation.
