A practical guide to unlocking hidden value in your property portfolio

Here, Julie Powell, Associate Solicitor in the Leasehold Enfranchisement & Management services team at Blacks Solicitors LLP, sets out the practical steps landlords should take and the pitfalls to avoid.

Why split a title? 

The commercial logic is straightforward. A building comprising multiple units, held under a single freehold title can only be sold as one lot. Split that title, and each unit becomes a separate, saleable asset, opening the property to a far wider pool of buyers, including individual purchasers and smaller investors who would not consider buying an entire block. Beyond sales, title splitting gives property owners the ability to:

• Sell selectively — dispose of some units while retaining others, reducing the Loan-to-Value ratio on the remaining portfolio and freeing up capital without exiting a building entirely.

• Refinance unit by unit — individual leasehold titles open the door to buy-to-let mortgage products, which typically offer better rates than the commercial lending arrangements required for a single freehold block.

• Reduce dispute risk — properly drafted individual leases clearly allocate responsibility for service charges, maintenance, insurance and shared areas, rather than leaving these matters ambiguous under a blanket arrangement.

Practical advice: Where things can go wrong 

1. Getting the lease plans right

HM Land Registry requires compliant lease plans clearly showing the extent of each unit, its boundaries and any common parts. Getting these wrong is the single most common cause of delay in the registration process.

Practical advice: Instruct a surveyor experienced in preparing Land Registry-compliant lease plans and ensure they have accurate, up-to-date information about the layout of each unit. Boundaries must be drawn precisely, with shared structural elements, common parts and any easements for access, drainage or pipework clearly identified. Errors or omissions at this stage will result in Land Registry requisitions that can add weeks or months to the process.

2. The "lease to yourself” trap

This catches many property owners off guard. A lease requires two distinct legal entities, a landlord and a tenant. A company cannot grant a lease to itself, and an individual cannot be both freeholder and leaseholder of the same flat. If the same entity appears on both sides, the lease is invalid and will not be registered.

Practical advice: Address this at the outset. The most common solutions are:

• Set up a special purpose vehicle (SPV) to hold the freehold and grant the leases to the existing owner (or another entity) as a tenant.

• Transfer the freehold to a management company or third party, which then grants leases back.

The ownership structure must be considered and put in place before leases are granted. In practice, this is one of the most common causes of avoidable delay — lease drafting cannot be finalised until the parties are confirmed, and that often depends on tax or accountancy advice that has not yet been taken. Addressing the structure early keeps the process moving.

3. Failing to coordinate with lenders

Title splits rarely happen in isolation. Where a property is mortgaged, lender consent is essential before any division can proceed. Lenders will want to review the proposed leases in detail and confirm that their security is not compromised before agreeing to release or vary their charge.

Practical advice: Engage the lender and solicitor early. It is usually the case that refinancing is running alongside the split, and the two need to be carefully coordinated to avoid last-minute issues that could jeopardise the wider transaction.

Lease drafting: the detail that pays for itself 

Many leasehold disputes that arise years after a title split can be traced directly back to poorly drafted leases at the point of splitting, which is why it is worth taking care over this stage rather than rushing through it.

Every building operates differently, and the leases should reflect how the building actually works. Key provisions to get right include:

• Service charge apportionment — how costs are divided between units, what happens if a unit is vacant, and how major works are funded.

• Maintenance obligations — who is responsible for the roof, external walls, communal areas and shared services, and what happens if a leaseholder fails to comply.

• Rights of access — ensuring each leaseholder (and the freeholder) has appropriate rights to enter other parts of the building for maintenance, repair and emergencies.

These provisions should be tailored to how the building actually operates, rather than lifted from a generic template. Investing in building-specific lease drafting at the outset is far cheaper than resolving disputes that arise from ambiguity later.

Getting It right from the start

Title splitting is one of the most effective strategies available to landlords, developers and property investors looking to increase flexibility and realise value, but only where the legal groundwork is thorough. Those who achieve smooth, timely completions are the ones who plan the ownership structure before they act, engage their solicitors and lenders early, and treat lease drafting as the foundation of the project rather than a box-ticking exercise.

Blacks Solicitors has advised numerous clients on complex title restructuring projects,  from individual conversions through to multi-unit developments, coordinating splits with refinancing, phased disposals and portfolio reorganisations. If you are considering a title split, whether as part of a new acquisition, a conversion or an existing portfolio, early legal advice can save significant time and cost further down the line.

Julie Powell, Associate Solicitors in the Leasehold Enfranchisement & Management Services team at Blacks