Title splitting glossary: every term explained

How to use this page

The terms are grouped by where you meet them: the building, the legal process, the money, the tax, and the words we use in our own coaching. Each definition is short on purpose. Where a term has its own article, the definition links to it.

The building

Title split: The legal process of dividing one registered title into two or more separate titles, each with its own HM Land Registry title number and its own registered plan. For a block of flats, the freehold stays as one title and a long lease is granted for each flat, so every flat becomes a separately mortgageable and saleable leasehold title. See what is a title split?
Freehold: Outright ownership of the land and the buildings on it, with no time limit. A block has to be freehold, and in your hands, before you can split it.
Leasehold: The right to occupy and deal with part of a building for a fixed term under a lease granted by the freeholder. In a split, each flat becomes a leasehold title.
MUFB (multi-unit freehold block): One freehold title containing several self-contained flats, usually let on separate tenancies. The raw material of a title split: the flats already exist, only the ownership structure changes.
Block of flats: Used loosely for any building of several self-contained flats, purpose-built or converted. The distinction matters: a converted block may be a Section 257 HMO, a purpose-built one is not.
Mixed use: A building with both residential and commercial parts, typically flats over a shop or office. Welcome in a title split: it can change the stamp duty treatment and commercial agents tend to price it on income.
Self-contained: A flat with its own front door, kitchen and bathroom, and its own utility supplies. Lenders treat a flat without separate gas, electricity and water as not yet a self-contained saleable unit.
Unsplit utilities: A block where the flats share a water supply, an electricity feed or a heating system. Separating them is a construction project with its own cost, not a title split; price it as one.
Common parts: The parts of a block nobody owns exclusively: hallways, stairs, bin store, bike store, communal garden. The leases have to say who can use them and who maintains them.
Section 257 HMO: A converted block of self-contained flats that counts as a house in multiple occupation under section 257 of the Housing Act 2004, because the conversion did not meet the relevant building standard and fewer than two thirds of the flats are owner-occupied. Outside mandatory licensing, inside some councils' additional schemes. See block of flats, or a Section 257 HMO?
EPC, EICR, FRA: The compliance documents a lender wants per flat or per building: an Energy Performance Certificate for each flat, an Electrical Installation Condition Report, and a Fire Risk Assessment for the building. Ask the seller for them at the negotiation stage.

The legal process

HM Land Registry: The government body that registers ownership of land in England and Wales. A split is not complete until Land Registry has registered each new title.
Title number: The unique reference Land Registry gives each registered title. The point of a split is that every flat ends up with its own.
Lease plan: A plan of each flat drawn to Land Registry's standard, showing exactly what is inside the flat (the demise) and what is shared. Every new title needs one; a non-compliant plan is rejected and delays registration.
Demise: The precise extent of what a lease grants: which rooms, which walls, which cupboards. The red line on the lease plan.
Long lease, 999-year lease: A lease granted for a very long term. Our practice is to grant 999-year leases with a low ground rent, because that is what the widest pool of lenders and buyers wants.
Ground rent: A rent paid by the leaseholder to the freeholder under the lease. Leasehold reform has been closing down ground rent as an income, so we keep it low or nominal.
Service charge: The leaseholders' contribution to the cost of maintaining the building and common parts: roof, external decoration, block insurance, alarm servicing. In a group structure the freehold company recharges these to the leasehold company.
Restrictive covenant: A promise in the lease about what the leaseholder may not do: change of use, noise, pets, subletting. Properly drafted covenants keep a block liveable and saleable.
Easement, right of way: A legal right to use someone else's land for a purpose, such as walking across the hallway to reach your flat. A split has to grant the rights each flat needs or the title is worth little.
Head lease: A lease sitting between the freehold and the individual flat leases. Occasionally used as a workaround where a freeholder cannot be found, at the cost of harder lending and lower saleability.
Expedite: A request to Land Registry to deal with an application ahead of the standard queue where there is a good reason, such as a sale or mortgage waiting on the new title. Ask for it by name. See how long does a title split take?
Split on acquisition: Buying a block and granting the leases on completion day, borrowing against the split value from day one. The route most of our clients use.
Split on refinance: Buying the block whole, holding it, then splitting at the point of refinance. More money up front; time to fix compliance or tenancies first.
Split on sale: Splitting one flat at a time as each is sold, each buyer taking a new lease. Common on conversions and developments.
Group structure: A holding company that owns the freehold and a subsidiary that takes the leases, kept in one group so the lease grants do not trigger a second stamp duty charge. Needed because you cannot grant a lease to yourself. See the title split process, step by step.
SPV (special purpose vehicle): A limited company set up to hold one property or one deal. The leasehold subsidiary in a title split is usually an SPV.
Dual representation: One solicitor's firm acting for both you and the lender. Faster where a lender allows it; often run on reduced due diligence backed by title insurance that protects the lender, not you. Ask which basis your file is on, in writing.
Title insurance, indemnity policy: Insurance against a defect in the title or a missing document. Usually required by the lender, priced at roughly a fraction of a percent of the purchase price.
Option, purchase lease option: A right to buy a property later at an agreed price, sometimes with the right to let it in the meantime. You cannot split a title you do not own, even under an option; you can only prepare.
Restriction on title: An entry on the register that stops the owner dealing with the property without a condition being met. Gives an option real teeth by preventing the seller selling or mortgaging to anyone else.
Delayed completion: Exchanging contracts with a completion date set well into the future, so works or planning can be progressed before completion. A higher-risk, more advanced technique.

The money

Uplift: The difference between what a block is worth as one title and what the flats are worth as separate titles. We teach clients to focus on splits where the uplift is around 25% to 45%, often without any physical work.
Special assumption valuation: A valuation on the instruction that something is true which is not yet true on the day: that the block has already been split. It lets a lender lend against the split value on completion.
Comparable: A recent sale of a similar flat nearby, used by a valuer to evidence what your flats are worth. Close, recent and genuinely similar is what makes one stand up. See how a valuer decides what your split units are worth.
Valuation memorandum: A written pack of evidence given to the valuer so they can reach a properly informed opinion: comparables, rents, the lease structure. Giving a valuer complete evidence is good practice; leaning on them for a number is not.
ERV (estimated rental value): What a flat or unit would let for on the open market today, as opposed to the rent it happens to be on. Valuers use it to value income-producing property.
Bridging finance, a bridge: Short-term lending, usually charged monthly, used to buy quickly or to buy something a mortgage lender will not touch yet. The exit is a refinance onto term finance once the split is registered.
Term finance, a term mortgage: An ordinary multi-year mortgage. The destination of a bridge, and the first choice where a lender will go straight to it on the special assumption valuation.
Direct to mortgage: Completing a split-on-acquisition deal straight onto a term mortgage, with no bridge. Cheaper and simpler where it is available.
Refinance: Replacing one loan with another, usually to borrow more against a higher value or to move from a bridge to a term product.
Loan to value (LTV): The loan as a percentage of the property's value. On a split, the value is the split value, which is why the deposit can be smaller than on a whole-block purchase.
Portfolio mortgage: One mortgage from one lender covering every flat in a split block. One legal process and lower valuation fees, at the cost of fewer lenders to choose from at renewal. The alternative is a separate mortgage per flat.
Personal guarantee: A director's personal promise to repay a company's loan if the company cannot. Standard on company lending; it is why doing large splits with no funds behind you is dangerous.
Independent legal advice (ILA): Advice from a separate solicitor on a personal guarantee, which the lender requires. Charged per lender, not per flat.
Equity release: Borrowing against value you already own to take cash out. On the best split deals, the gap between the bridge and the eventual mortgage comes out as cash.
Deferred consideration: Part of the purchase price paid later, by agreement with the seller, sometimes interest-free. A way of closing a gap between the asking price and what the numbers support.
Deal stacking: Working out whether a deal makes money: price, costs, finance, rent, value, exit, with every line tested. What Deals and Analysis teaches.
Yield: Annual rent as a percentage of price or value. Used to compare income-producing buildings and, by commercial agents, to price them.

The tax

Stamp duty land tax (SDLT): The tax on buying land and property in England and Northern Ireland. Scotland and Wales have their own equivalents. Rates and rules change; always check with your accountant.
Non-residential rates: In England, buying six or more dwellings in one transaction, or a genuinely mixed-use building, is treated as non-residential for stamp duty, which is usually a materially lower bill than residential rates with the surcharges a company buyer pays.
Share purchase: Buying the company that owns the building rather than the building itself. Stamp duty on shares at 0.5% instead of SDLT, with much higher corporate legal costs and the company's history inherited with it.
Capital allowances, VAT, capital gains: Three tax areas that come up on commercial and mixed-use blocks and on exits. Each is an accountant's job; nothing on this site is tax advice.

Words you will hear in our coaching

The n-1 trick: A way of using the last unsold or unrefinanced flat in a block to tidy up the overall financing position. One of the ways clients have been able to pull out more than they put in on the right deal. Taught in Deals and Analysis.
Offer to Exit: Our programme that takes a client from finding a block, through the offer and the split, to exiting onto term finance, working alongside us on their own deal.
Deal clinic: The weekly session where community members bring live deals and we work through them together.
Direct to vendor: Finding and negotiating with a seller directly rather than through an agent. One of the sourcing routes we teach.
Hold, sell some, sell all: The exits a split creates. A split block is not committed to one exit the way a whole block is; the optionality is the point.

These definitions describe how the terms are used in England and Wales and in our own coaching. They are general information, not legal or tax advice. Several of them (leasehold reform, stamp duty, lender criteria, licensing) sit on rules that change, so confirm the current position with the right professional before relying on any of them in a deal.

The questions these terms answer most often

What does MUFB mean?

MUFB stands for multi-unit freehold block: one freehold title containing several self-contained flats, usually let on separate tenancies. It is the raw material of a title split, because the flats already exist and only the ownership structure needs to change.

What is a special assumption valuation?

A valuation carried out on the instruction that something is true which is not yet true on the day, in a title split, that the block has already been divided into separate leasehold flats. The lender uses it to lend against the split value on completion, which is what lets the split happen on acquisition.

What is the n-1 trick in title splitting?

A way of tidying up the overall financing position by using the last unsold or unrefinanced flat in a block. We teach it in Deals and Analysis; it is one of the ways clients have been able to pull out more than they put in on the right deal.

What is the difference between freehold and leasehold?

Freehold is outright ownership of the land and the building on it, for ever. Leasehold is the right to occupy and deal with part of a building for a fixed term under a lease granted by the freeholder. In a title split, the freehold stays as one title and each flat gets its own long lease, so it becomes a separate leasehold title.

Got a block in mind?

Book a free fifteen minute call and tell me about it. I will tell you straight whether it looks like a split worth doing, what would get in the way, and what to check before you spend a penny.

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Title splitting glossary: every term, in plain English