Title splits & creation of new leases

If you own a building containing multiple flats held under a single title, you may not realise that you can split that title and create individual leases for each flat. Title splitting is a strategy that gives each unit its own legal identity, making it easier to refinance, sell and manage your property more flexibly. It is an approach that an increasing number of landlords and investors are now adopting.

What is title splitting?

In simple terms, title splitting is the process of dividing one freehold title into separate leasehold interests. Each flat is granted its own lease, which is then registered at the Land Registry with a unique title number. As a result, each unit within the building stands independently, rather than being held under a single title.

This approach is commonly used by:

• Landlords renting out multiple flats within one building
• Property owners looking to refinance individual units
• Developers preparing a building for sale or investment

Why consider it?

There are several compelling reasons to split a title.

First, refinancing. Lenders typically prefer individual titles, and having separate leases in place can make it significantly easier to secure finance on favourable terms.

Second, flexibility on sale. Rather than being limited to selling the entire building as a single lot, you can market and sell flats individually, opening the property to a wider pool of buyers.

Beyond financing and sales, title splitting also brings greater legal clarity and improved management. Each lease clearly defines rights and responsibilities, including service charges, maintenance obligations and insurance, which can reduce the potential for disputes.

There is also a strategic advantage. You may choose to retain some flats and sell others, helping to reduce your loan-to-value ratio on the remaining units and strengthen your overall financial position.

A key legal consideration

One point that often catches property owners off guard is that you cannot grant a lease to yourself. A lease requires two distinct legal entities: a landlord and a tenant.

This means:

• A company cannot grant a lease to itself
• An individual cannot be both freeholder and leaseholder of the same flat

If the same entity appears on both sides of the lease, it will not be valid or registrable at the Land Registry.

There are, however, practical solutions. These typically include:

• Setting up a separate company or special purpose vehicle to hold the freehold and grant leases
• Transferring the freehold to a third party or management company

It is essential that this structure is put in place correctly from the outset to ensure the leases are valid and acceptable to both lenders and the Land Registry.

Frequently asked questions:

Do I need planning permission to split the title?

Not usually. Title splitting is a legal process rather than a physical one. However, if physical alterations to the building are required, planning or building control approval may be necessary.

Can I keep the freehold?

Yes. You can retain the freehold and grant leases to each flat, or transfer it to a management company if that better suits your circumstances.

Will this affect my mortgage?

Potentially. It is important to liaise with your lender at an early stage to ensure the proposed lease structure meets their requirements.

What are Land Registry-compliant plans?

These are detailed drawings showing the layout and boundaries of each flat. They are required for registering new leases and we can recommend trusted surveyors to prepare them.

How we can help

Our specialist Leasehold and Enfranchisement team provides a full end-to-end service covering every aspect of the title splitting process. This includes reviewing your existing title, drafting bespoke leases tailored to your building and future plans, advising on lease provisions, liaising with lenders to confirm that lease structures meet mortgage criteria, and registering leases to secure individual title numbers.

Timescales vary depending on complexity and whether compliant plans are already available, but the process typically takes between six and twelve weeks.

If you would like advice or assistance on the issues raised in this article, please contact our Leasehold Enfranchisement & Management Services team on 0113 207 0000.