What Is Flying Freehold Insurance? And Do You Need It?

Buying a house can be stressful and comes with its own array of challenges. One day you are looking for houses, the next you are having words like “property surveys”, “mortgage lenders” and “flying freehold insurance” thrown at you. It can be easy to feel panicked and overwhelmed with all these new phrases.

But not to worry. Unless you are buying an older property, you probably won’t have to worry about flying freehold or the insurance that comes with it. However, if you are considering buying a house with one, then this is the article for you. In this post, we will be looking at all things to do with it, from what it is, how to identify it, and if you need to insure it.

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What Is Flying Freehold?

The phrase “flying freehold” may at first glance appear quite intimidating but the definition is quite simple. It’s a term that is used to describe a freehold that overhangs onto or underlies another freehold.

Usually found on older buildings, they were developed in a time with different conveyancing methods to now. These are mostly now a thing of the past, with conveyancing solicitors now ensuring that properties in both England and Wales have a completely vertical division.

How Do I know If I have it?

Flying freehold can include all sorts of shapes and sizes. It can include any of the following:

  • Any property that has a room that sits directly on top of a shared passageway
  • Properties that have a balcony that overhangs onto next door neighbour’s property
  • A property where part of the building underlies or overhangs onto another freehold property
  • A converted attic where one freehold property overlies another freehold property
  • Any property where a basement or cellar goes underneath a neighbouring property
  • A property that is either terraced or semi-detached with a dividing wall that doesn’t sit vertically down the middle

However, it is not always obvious when a property is classed as such. In order to properly check, any potential purchaser should check the house carefully for any sections that appear to be out of bounds.

If you are under any doubt, then you should refer to your surveyor or solicitor who can physically inspect the property and advise on their findings.

What Is A Flying Freehold Mortgage?

A flying freehold mortgage is a mortgage product that can be used to purchase a flying freehold property.

What is the mortgage lender’s perspective on it?

The biggest challenge a seller may face when it comes to selling a house with a flying freehold is the mortgage lender. Some mortgage lenders operate on a strict ‘no lend’ policy when it comes to the property with one, however, the majority will lend, but they may impose specific conditions on the loan.

According to information found on the Express Conveyancing website, the table below shows the position on lending against a property with a flying freehold for different lending institutions:

 Lender Lending Position On A Flying Freehold
 Nationwide Building Society  Yes, if only part of the title is a flying freehold. 
 Barclays  Yes, providing it affects less than 15% of the overall external footprint, and adequate rights of support and mutually enforceable repairing covenants exist.
 Santander UK Yes, but will not accept Title Indemnity Insurance in certain cases.
 Lloyds Banking Group Yes, if only part of the property is affected. No, if the whole of the property is affected.
 Natwest Group Yes, providing it is possible to enforce positive covenants, although the Maximum Loan to Value (LTV) is restricted to 90%.

Why Are They Not As Popular Anymore?

The reason why they are now a thing of the past is two-fold. Not only do flying freeholds depend on the neighbouring property for both structure and stability, but they also often require access to the neighbouring property in order to complete essential repairs or for maintenance to be carried out.

The problem arises from the fact that they rarely benefit from rights of support, rights of shelter and rights of access.

Rights of support and rights of shelter

Without specific rights of support from the property beneath or rights of shelter from the property above, the owners of these properties could technically demolish their adjacent or subjacent buildings without any consideration for the flying freehold.

This can severely impact the structure of the flying freehold.

If the neighbouring properties allow the buildings to fall into disrepair, structural problems can also arise.

Rights of access

There will be a time when a flying freehold requires repairs, and you may need to gain access to the neighbouring property in order to carry out the works. Without rights of access, consent from the land/property owner would need to be gained.

If this person declines, it can leave you unable to make the repairs and sustain your property.

How Do I Know If A Flying Freehold Has These Rights?

In order to see if you have these rights, you will need to carefully check the title deed for the flying freehold to see whether or not you have the rights of support, rights of shelter and rights of access.

The title deed will also outline your other rights and responsibilities that are the legal obligation of the freeholder.

What Can Be Done In The Absence Of These Rights?

  • Title Indemnity Insurance – Title Indemnity Insurance would cover you in the event of damage to your property due to lack of repair of the adjoining company and costs incurred in prosecuting the owner.
  • A New Mutual Agreement – A new mutual agreement, also known as a deed of covenant to vary title deeds, is an agreement set up between the two owners that set out reciprocal rights and obligations. This agreement will not bind future owners unless they agree to be bound by it when they purchase the property. Whilst these matters can be drafted into the agreement and reinforced by registering a restriction on the title deeds with HM Land Registry, it can be costly and time-consuming to put in place.
  • Alternative Structure – You may be able to convert the flying freehold to an alternative legal structure, such as a leasehold. By doing so, you can create only one freehold out of which a 999-year lease is granted to the adjoining owner. The main advantage to this is that you bestow all of the appropriate rights and positive covenants as part of the leasehold, and will not be affected by the transfer of the freehold or leasehold interests to parties in the future. However, it is worth noting that a lease is expensive and time-consuming, and there may also be tax implications, so unless you are knowledgeable in this area of the law you will require legal assistance.

Why do you need flying freehold insurance?

The main downside to a flying freehold property is that if the adjoining property falls into disrepair, it can affect the structure and stability of the house. Flying freehold indemnity insurance is an extra layer of security that protects you in case of the event that your neighbour refuses to keep their house in working condition.

If your neighbour refuses to carry out repairs, flying freehold insurance will provide cover for the repairs and protect your property, even if the adjoining property is uninsured.

Flying freehold indemnity insurance is not just extra security for you and your home, it is also recognised as providing cover for a mortgage lender’s interest.

The issues that can surround a flying freehold property

Neighbourly struggles

Falling out with your neighbour is never ideal, but especially not where a flying freehold is involved. Breakdowns between neighbours can make it difficult to gain permission for access rights and for work to be carried out.

Damage to properties above and below

There is no legal requirement for people to maintain their properties or for them to carry out essential work. Whilst in a standard house this would only be a problem for the residents, in a house with a flying freehold this is not the case. If there is a leak in the upper property, it can risk damaging the underlying property as well.

Is it a problem?

In short, a property like this is not necessarily an issue. Whilst in legal terms it is easy to see how it may be a slight cause for concern, normally property owners with one have nothing to worry about.

Problems usually only arise when a flying freehold property requires repairs and the rights for access, shelter, or support are not contained in the title deeds.

Although it may be possible to find a solution, the decision to purchase a property with a flying freehold is not one that should be taken lightly.

That sums up just about everything you need to know about flying freehold and all the questions that come with it. If you have any insight into the topic, or any questions and queries we haven’t covered, feel free to get in touch!

Alexandra is a junior content producer who enjoys writing articles and finding out more about the property market.

About Alexandra Ventress 23 Articles
Alexandra is a junior content producer who enjoys writing articles and finding out more about the property market.

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