Last updated on January 21st, 2022 at 03:05 pm
Are you considering taking out Multi Unit Buy To Let Mortgage for a purchase or to refinance an existing freehold block property investment? Lets discuss the key features and things to consider with MUFB Mortgages.
Multi Unit Freehold Blocks (MUFB) can make a great property investment with high yields and risk spread over a number of paying tenants. However taking out a MUFB mortgage is not as straight forward as taking out a mortgage on a standard buy to let house. There are more things to consider and a lower number of available lenders to choose from.
Whether you are exiting a multi unit development, making a new multiple unit apartment purchase or refinancing an existing freehold block of flats. There are important factors when applying for a MUFB Mortgages:
- How many apartments or flats does the multi unit freehold block have?
- Are you planning to let out each unit individually on an AST?
- Is the MUFB currently Fully Occupied?
- For a refinance, are you looking to raise additional capital?
- What is the Multi Unit Freehold Block value vs individual unit resale value?
- Is the Multi Unit property owned by a trading business, SPV Limited Company or an individual?
Working with a professional buy to let property finance broker can help you navigate the different lending requirements an criteria.
Key Features of Multi Unit Buy To Let Mortgages
There many variables with Multi Unit Freehold Block mortgages that can impact on the maximum LTV available and interest rates. The key factor being the number of Units and block investment value vs the separate value of individual units.
However here are some of the key features you can expect when arranging a mortgage for a multi unit investment property.
- Maximum LTV Up To 75%
- Interest Only & Capital Repayment
- Refinance & Capital Release
- Fixed Rates For 2, 3, 5 Years
- No minimum income required
- High Value Cases Up To £25 million
- Complex Ownership Structures
- Portfolio Landlords
- Buy to Let Mortgage Terms Up to 30 years
- Individuals, LLPs, Limited Companies, PLCs, Trusts, SIPPs & Expats
Fill in the form below and one of our MUFB Mortgage experts will be in touch straight away.
Types of Multi Unit Freehold Blocks
You can arrange Buy To Let mortgages on a wide range of multi unit property types. Its important to understand exactly what your property is before approaching lenders. As criteria and availability varies between banks and lenders.
- Blocks of Apartments & Flats
- Student Accommodation
- Retirement Living & Villages
- Ex-Local Authority Flats
- Flats Above Commercial
- Local Authority
- Vulnerable Tenants
- Commercial To Residential Conversions
- Multiple Units On One Freehold
- New Build Apartments
- Multiple Residential Units on One Freehold Title
- Development Exit
Specific issues around construction type and cladding, need to be considered on a case by case basis. There are specialist lenders that may still offer a mortgage, even if you have been declined elsewhere.
When Do You Need A Multi Unit Freehold Block Mortgage?
If you are buying a multi unit freehold block property as an investment, then you need a buy to let mortgage designed for multi units. You cannot just apply for a standard buy to let mortgage, as most are for single residential homes.
There are plenty of lenders that offer mortgages on Multi Unit Freehold Blocks (MUFB). It is likely that the annual interest rate you pay will be 1-2% higher than a standard Buy To Let mortgage.
As with most mortgages, the bigger deposit you can put down, then the lower the interest rate could be.
We work with a number of specialist banks and lenders that provide mortgages, up to 75% on all types of multi unit buy to lets.
We can assist with mortgages for:
- Multi Unit Freehold Block
- Multi Unit Buy To Lets
FAQ: Multi Unit Mortgage and MUFB Mortgages?
Lets look at some of the common questions around Multi Unit Freehold Blocks and the type of buy to let mortgages you need for them.
MUFB is an abbreviation for the term “Multi Unit Freehold Block”. It is a type of property that has more than one self contained apartment/flat, without any shared living areas. Property investors often purchase or build a MUFB’s as they can have high yields and the risk is spread across multiple tenants on AST’s.
A MUFB Mortgage is a type of buy to let mortgage that you need when investing in a multi unit freehold block. This could be a block of flats or a large house slit into multiple self contained apartments. As its a more specialist property investment, rates can sometimes be higher than a standard buy to let.
Any property that has more than one single dwelling on a single freehold title, will be classed as a multi unit property. Each residential unit must be self contained without any shared living spaces. Properties with multiple rooms and shared facilities like Kitchens will be classed as a HMO.
Although a MUFB and HMO are similar in that they have multiple units, they require different finance. In a Multi Unit Block, every single unit must be self contained with its own entrance. Where as in a HMO, there may be shared living areas such as living rooms, kitchens and bathrooms.
Yes there are specialist providers that offer mortgages for Student Accommodation. Many Student apartments are classed as multi units if there is multiple individual apartments in one building.
Typically the Interest rate on a Multi Unit or MUFB mortgage are higher than a standard buy to let. This could be in the region of 1 – 2 % per annum more. Although this depends on your individual circumstances and other things like size of deposit.
If you are planning to purchase a multi unit property investment, then you can apply for a buy to let mortgage. These are usually up to a maximum loan to value (LTV) of around 75%.
You will need a buy to let mortgage from a lender that allows residential properties with multiple units. Generally if there are less than 6 units, there is a wide choice of lenders. If there are more than 6 a specialist lender may be required.
Apply For A MUFB Mortgage today
Get in touch to speak with one of our independent Buy To Let multi unit mortgage experts. Find out what rates and LTV is available.
Call us Mon – Fri 9am – 5pm on 0161 5469128 or fill in the form below and we will be in touch straight away.
Multi Unit Freehold Block Mortgage Broker
We work with landlords, developers and property investors to source a wide range of MUFB mortgages and property investment finance.
No matter what property type or complex circumstances, we are happy to assist.