Mortgages for Multi-Unit Freehold Block / Unbroken Block of Flats
Written by Dalia Zaher
Updated at September 3rd, 2025
Table of Contents
Welcome to Advocate Finance, your trusted broker in securing multi-unit freehold block mortgages!
As established buy-to-let and commercial finance brokers, we understand the unique needs of property investors and business owners. We are here to provide tailored financial solutions that help you achieve your goals.
Whether you are looking for a MUFB mortgage, loan or refinance, we cover all aspects to ensure your success.
What is a Multi-Unit Freehold Block (MUFB)?
This is one freehold residential property split into multiple flats that don’t have their own individual title. Often abbreviated as MUFB’s, this type of asset class is proving to be very popular for many landlords.
Multi-Unit Freehold Block (MUFB) Mortgages
However, financing MUFBs is not as straightforward as it may be for simple singular houses and flats. There are fewer lenders available and many mortgage advisers do not have the required level of expertise. Fortunately, our Advisers are experts in this area of Buy-to-Let lending. We also have access to a large range of lenders and products, that will best suit the scenario you are faced with when it comes to Multi-Unit Freehold Blocks of flats.
Finding a solution for your standard blocks of flats is not too problematic in the current market. However, when there are quirks and unusual circumstances related to these properties, this is when it can become challenging. Fortunately, the knowledge we have in this area allows us to find you a solution when no one else can.
What do we mean by quirks and unusual circumstances being related to your MUFB?
- Firstly, we do have access to lenders who can accept blocks of flats, where some of the individual units within the block may be below 30 sq meters. For many lenders, this can be a problem.
- We also have lenders available that can lend on a block of flats when the utilities for the separate units originate from the same mains (gas, electricity, etc.).
- Another problem area that we can help with, is finding a lender to accept an MUFB that may have some of the flats sold off/kept on separate leasehold titles. This is sometimes referred to as a broken-up block of flats, as the block consists of both a freehold block and separate leasehold flats.
Key Features: MUFB Mortgages
- Mortgage Range: MUFB Mortgages from £100,000 to £50 million; subject to affordability and credit criteria
- Loan to values: up to 75% (100% with cross charges)
- Loan to values: below 50% could be eligible for standard BTL mortgages, thereby benefitting from lower interest rates
- Mortgage Term: 1 to 30 years
- Payments: interest only / capital repayment
- Purpose: Purchase / Refinancing / Capital Raising
- Income Requirements: No minimum outside income / All income types
- Requirements: No max of number of rooms / units or tenancies
- All credit histories: High Net Worth to Credit Repair
- All applicant types: Individuals / Corporate (Ltd Co’s) / SSAS etc.
- All tenures: Freehold / Leasehold (no minimum term)
- All residential tenants: Working, Students, LHA benefits
- All residential tenancies: AST to Corporate Leases
- All business tenants: No restrictions on industry/sector
- All business tenancies: Fully repairing leases / Licences
- EPC-enhanced products: Available
What is an Unbroken and Partially Broken Block of Flats?
Despite a different name a property that is an “Unbroken Block of Flats” is the same a Multi-Unit Freehold Block from a lender’s and valuer’s perspective.
For example, a block of 10 flats has 2 flats that have leaseholds created; as such the remaining 8 flats are still part of the freehold title. The property is still classed as a MUFB but because 2 are subject to leaseholds, they cannot be included in the value of the freehold property; some lenders will not lend on these properties because they want unbroken blocks of flats as security.
Do Multi-Unit Freehold Blocks need HMO Licensing?
You will have read in the section above that there are general rules on when a multi-let, HMO property requires a licence. But the local council can change this and implement their own requirements.
Lenders therefore cannot keep track of which councils have moved away from the general definition of when a licence is required. The lender will therefore require confirmation in writing or email, from the council when the property does not require an HMO licence.
For HMO properties that do not require a licence, the next important factor in selecting a lender is:
- Will the lender value the property based on the market rent as a multi-let, HMO or single-family rent? This is extremely important to you and your broker because lenders assess this differently and the amount you can borrow is dependent on the market rent.
- The number of tenants – Some lenders limit the number to 4; however, there are lenders that have no limit.
- Does each tenant have their own tenancy agreement or have they signed one tenancy agreement?
- Do the rooms have locks on the doors? This will be reported to the lender by the valuer when they visit.
Steps to Securing a MUFB Mortgage
The Valuation Methodology is an Important Factor!
Using the services of a broker that understands how the property is valued is crucial as it affects the amount you can borrow.
Our mortgage brokers will carefully consider the suitable lenders for your circumstances depending on how much you are looking to raise relative to the value of the property. But the property’s value can differ depending on the valuation methodology the lender instructs the valuer to use.
With respect to MUFB properties, the biggest difference is whether the lender will use a Block value/Market Value or an aggregate/break-up value of the property.
Block Valuation |
Aggregate Valuation |
This is used for purchases rather than refinances and is effectively the market value of each unit but with a 10%-15% discount applied to the total. This is because the investor is buying the whole block of flats, and as such is expected to command a block discount. |
This is the value of each individual unit as if it was on its own leasehold title, but without the need to legally split the title. This is typically higher than a block valuation as the discount is not applied, so preferably used for refinances as you already own the property. |
Benefits of MUFB Mortgages
Advantages of MUFB |
Disadvantages of MUFB |
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Overall Yield and Income Sources: The potential yield produced from an MUFB will also attract investors to these properties as they tend to produce higher yields. This is because of the block discount and the rental income being the same as equivalent long leasehold flats. |
Charges: Some larger blocks of flats can involve large capital sums and the deposit requirements can be large for investors that do not have access to larger deposits. |
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Block Discount: MUFBs consisting of multiple units are often cheaper to purchase, than if you were to buy the equivalent number of flats but as separate units – this is referred to as the block discount. |
Lenders: There is a large panel of lenders that will provide mortgages but this is still far less than for standard houses or flats. |
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Less Expenses and Good Investment: they don’t have the operating expenses associated with HMOs and run-down multi-unit blocks can form part of your BRRR strategy, which can also involve title splitting at the end of the refurbishment to create individual leasehold flats. |
Experience: Some lenders will require existing landlord experience. |
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Less management time: They are easier to manage than multiple individual flats and houses as they are all within the same block. This will help improve your time management across your portfolio as you are not having to drive to multiple properties. |
Why Choose Advocate Finance for MUFB Mortgages?
Expertise and Experience:
- At Advocate Finance, we specialise in providing brokering services in multi-unit freehold block mortgages.
- Our team of experienced mortgage brokers have extensive knowledge of the unique challenges and opportunities associated with these types of properties. We understand the intricacies of the market and can provide expert guidance tailored to your specific needs.
- If speed is essential to the transaction, our advisers will prioritise your case to ensure deadlines are met.
Tailored Financial Solutions:
- We recognise that every client has unique financial goals and requirements. Our approach is highly personalised, ensuring that we offer tailored financial solutions that align with your investment strategy. Whether you are looking to purchase, refinance, or raise capital, we have the right mortgage product for you.
Competitive Fee Structure
- We offer a FREE assessment with one of our mortgage brokers
- We have a no upfront fee policy
- Clear & transparent fee structure agreed upfront and in writing
- Want to read what our customers say? Read our testimonials & Google reviews
Comprehensive Range of Services:
- Advocate Finance offers a wide array of mortgage products and services. From bridging loans and refurbishment loans to long-term buy to let financing options, we cover all aspects of property finance. Our comprehensive service range means you can find all the financial solutions you need under one roof.
- Efficient and reliable – Known for our rapid response and dependable service, we ensure timely financial solutions. Our experienced team of mortgage brokers provide professional advice to help you navigate your buy to let mortgage options, ensuring you make well-informed decisions.