How Can You Get a Mortgage on a Freehold Flat?

Getting a freehold flat mortgage with no management company in place 

If you're having difficulty finding a lender willing to finance a freehold flat in a building without a management company, there are a few potential options you could explore: 

1. Specialist lenders - some lenders specialise in niche mortgage products, including financing for unique or unconventional properties. Consider reaching out to specialist mortgage lenders or mortgage brokers such as John Charcol who have experience with freehold flats in buildings without management companies. They may have more flexibility in their lending criteria and be willing to consider your situation  
2. Bespoke mortgage solutions - in some cases, lenders may offer bespoke mortgage solutions tailored to specific circumstances. Be prepared to provide detailed information about the property, your financial circumstances, and your plans for managing the property  
3. Private financing - you could explore private financing options. This could involve seeking a loan from private investors, family members, or friends who are willing to lend you the funds needed to purchase the property. Private financing arrangements may offer more flexibility in terms of the property's unique characteristics and your financial situation  
4. Property development finance - if you're open to making renovations or improvements to the property, you could explore property development finance options. Some lenders offer specialised financing for property development projects, including the conversion or refurbishment of existing buildings. You could use this financing to purchase the property and potentially establish a management company or undertake necessary upgrades to meet lender requirements  
5. Legal advice and structuring - consult with solicitors or legal advisors who specialise in property law to explore alternative legal structures for the property ownership. They may be able to offer insights into potential solutions or alternative arrangements that could address lenders' concerns and facilitate financing for the purchase of the freehold flat  
6. Property valuation and due diligence - ensure that you have a thorough understanding of the property's value, condition, and legal status. Commission a professional property valuation and conduct comprehensive due diligence to identify any potential issues or obstacles that may affect financing. Providing detailed information and documentation to lenders can help demonstrate the viability and security of the investment  

While it is unlikely you will find a mortgage on a freehold flat, you may be able to obtain a bridging loan. 

Bridging Loans as an Alternative 

Bridging loans are a short-term funding option typically used by property buyers to ‘bridge’ the gap when buying a new property and waiting for a traditional mortgage to be approved or capital to be released from the sale of their current home. Typically, you'd need to have the loan for 6 months, and then once the management company and leasehold is in place, you could look to remortgage to a standard lender as the exit strategy. 

It's essential to explore all available options and seek professional advice from mortgage brokers like John Charcol who have experience with unique property transactions. We can help you navigate the process, identify potential solutions, and find the best financing option for your specific circumstances. 

If you'd like to explore this option in more detail, then please contact one of our consultants on 0330 433 2927 and they'll be able to give you a clearer idea of how we may be able to help. For more information about the difference between freehold and leasehold properties please feel free to read our Freehold and Leasehold guide.