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Flying freeholds get cold shoulder from high street

Banks run a mile from the dreaded words flying freehold but luckily private banks take a more sensible approach

Simon White
Simon White Director London’s Chartered Surveyors

It was a good job I was on top form a couple of weeks ago. If I hadn’t been I might have dropped a right clanger.

Off I went to value an end of terrace mews house in Marylebone that sold at more or less the right figure. The unusual thing was the position of the first floor kitchen – it was directly above the reception room belonging to the adjacent building meaning that the property I was valuing had what is known as a flying freehold.

To mainstream high street lenders the words flying freehold mean forget it, you can’t have a mortgage, which I have always thought is a ridiculously harsh approach.

Flying freeholds can be a problem but only in the same way as Boris Johnson is an irritation to David Cameron – more of a thorn in the side really.

Your average high street lender can’t take a view because they have tick box valuation reports read primarily by a computer that automatically spits the application out as soon as the dreaded words flying freehold pop up.

But not so with a private bank, where valuation reports are read by human beings who can take a reasoned view.

In this instance the flying element amounted to no more than 5% of the total floor area and in any case was an original feature that had been there for more than 100 years.

I was asked whether it affected the marketability or value of the property and my response on both counts was no, so that was good enough for the bank – a refreshing attitude don’t you think?

Flying freeholds can be a problem but only in the way Boris Johnson is an irritation to David Cameron

As if that wasn’t enough excitement for one day, the same afternoon I pitched up outside a house in Wimbledon to do a building survey and my client asked me to comment on the effect that a restrictive covenant against being able to add an extension could have.

You would have thought that after 30 odd years in this game I would have been asked this question before but the fact is I hadn’t.

In fact I knew as much about restrictive covenants as I know about synchronised swimming but I had to find out.

The interesting and important thing to know is that restrictive covenants run with the land and not the owner.

Once clued up, I told my client that they could be enforceable and the only way to extinguish them would be with the consent of the current owner of the land or property that benefits.

This didn’t impress my client, who was Australian and took the view that if he bought the property he should be able do what he wanted with it.

What rubbed him up the wrong way further was when I told him that as it was a listed building he probably couldn’t extend it anyway, at which point he withdrew from the sale and headed straight for the Qantas departure lounge at Heathrow.

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  • wuls 23rd February 2011 at 10:12 am

    This simply isn’t true. Flying Freeholds with effective covenant arrangements and not involving commercial premises and in good locations are readily accepted by RBS, Nationwide, Lloyds, Santander, Saffron etc, Coventry, Coutts and HSBC. Really Barclays is the only mainstream leander that has tight restrictions (on floor area).