Updated: February 14, 2022

Maisonette Mortgages

Need either a freehold or leasehold maisonette mortgage? Unsure if a maisonette is a good investment? Find out all the answers in our in-depth guide!

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: February 14, 2022

Maisonette mortgages can be a little more complex than a standard home loan due to the ‘shared’ aspect of ownership, leaving potential buyers with lots of questions before committing to a purchase.

In this comprehensive guide we’ll explain why maisonette mortgages are different and how you can make sure you’re fully prepared to get the best deal for your circumstances.

Can you get a mortgage on a maisonette?

Yes, it’s possible. Although there are some nuances when it comes to borrowing to buy a maisonette, it is by no means rare. The options available to you will differ depending on whether you are buying a freehold or leasehold maisonette, but a good broker will be able to find the right deal whether you are looking for a residential or buy-to-let mortgage.

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How do they work?

When it comes to repayments, a maisonette mortgage is no different from any other home loan. You will need to meet the eligibility criteria, show you can afford the repayments and pass a credit check.

The difference between a freehold and leasehold maisonette

If you buy a freehold maisonette, you will own the property and the land it stands on. This may include additional buildings like a shed, or outside areas such as a garden or drive. In this case you are responsible for the upkeep of the entire property. Some providers will approve a mortgage for a freehold maisonette unless there are enforceable covenants in place for maintenance and repair. In many cases the loan to value (LTV) is capped at 85%.

When you buy a leasehold maisonette, you only own the property. While responsibility for its maintenance lies with you, the landowner is responsible for the building and any communal areas such as:

  • Roofing
  • Communal paving areas
  • Guttering
  • Garden
  • Driveway

A leasehold maisonette comes with additional costs that must be included in an affordability assessment:

Service charge:
Ground rent:

Although the building owner has legal responsibility for maintenance of shared facilities, they will expect you to contribute towards the cost. A service charge can be fixed or variable and reimburses the owner for the cost of general maintenance, repairs and buildings insurance. You should find the details of the service charge, including how much it costs and what it covers, in the management pack you receive from your solicitor.

This is essentially a rent you pay to the owner to live on the land the property is built on. Ground rent can be fixed but it’s quite common for it to go up at intervals throughout the term of the lease or according to a formula such as the value of the property. This is often a nominal fee (£50 – £100 pa) known as a ‘peppercorn rent’ but it’s worth checking out how much it will cost and factoring it into your budget.

Services charges and ground rent tend to be quite high for new builds and low for maisonettes on land owned by the local authority.

You can also buy a maisonette on a ‘shared freehold’ basis. This means that each property owner also buys a share of the freehold. Many providers will not lend on a shared freehold property due to the risks associated with multiple freeholders so you will find it more difficult, though by no means impossible, to obtain a mortgage.

It’s important to establish who owns the freehold as early as possible when buying a maisonette as it will guide your broker in determining which lenders are suitable.

How a broker can help you

For specialised lending such as this, the shrewd move is to seek the help of a broker with experience arranging these types of mortgages, rather than approaching lenders directly.

Here’s how an advisor we work with will be able to help you:

Identifying the right lender

Determining which maisonette mortgage is right for you will depend on several factors concerning the property itself and your personal circumstances.

Some lenders will be happy to approve an application for a property in a terrace of maisonettes but not for one that is attached to a business premises, for example. Others will be open to lend on any style of maisonette.

A broker who understands the way different lenders approach maisonette mortgages will be able to quickly establish which providers are most likely to approve your application, taking into account the property details and your personal circumstances.

Avoiding pitfalls

A broker will guide you through the anomalies of these mortgages by ensuring you fully understand the terms of the lease and any ongoing costs.

Length of lease

When you buy a leasehold maisonette it’s important to remember when the lease runs out, ownership of the property returns to the freeholder. This sounds more of a problem than it is in reality but does need to be given due consideration. Leases generally last for 99 years or more, however, lease extensions are fairly simple, often with the help of a solicitor.

Lenders typically consider anything under 90 years to be short for a lease. This can limit your options when you’re buying and lower the price when you’re selling so be wary.

Working out your income and expenditure

Failing to accurately assess your own income and expenditure by forgetting to include the costs of ground rent and services charges could result in you approaching a lender and being rejected. This can make it even more difficult to get accepted with future applications due to excessive credit checks on your file. You should take advice before approaching any lender, so you only apply to those who are likely to approve your loan.

Maisonettes above commercial or non-standard construction

Providers generally view a maisonette above shops, other commercial premises or non-standard constructions as riskier than standard residential properties. If you’re looking to buy one of these property types, it’s essential you seek advice as you will definitely need a niche lender.

Eligibility criteria

Other than the factors already highlighted regarding the actual status of the property, the eligibility criteria which applies for a maisonette is very similar to that for any other type of mortgage.

These include:

  • Affordability: Providers are duty bound to lend responsibly and will need to satisfy themselves that you can afford to keep up repayment on your loan. Not all lenders carry out the same affordability checks, though, so if you do not have a PAYE job or want to include other sources of income, your broker can find you the right lender. As a rule, providers will lend between 4 – 6 times your annual salary but there is flexibility with some specialist lenders.
  • Loan to Value: Many lenders place a maximum loan to value (LTV) on lending for maisonettes. This can be as low as 60% although there are providers who will allow 95% under some circumstances. Maximum LTV for a new build can be as low as 50%. The bigger your deposit, the lower your LTV and the greater chance of your application being accepted.
  • Credit rating: All lenders will carry out a credit check prior to approving a loan so it’s worth getting a copy of your report and dealing with any potential issues prior to making an application. A bad credit rating won’t necessarily stop you from getting a mortgage, but it will limit the number of lenders who will approve your loan and mean you pay higher rates.
  • Employment: People who are self-employed or have a non-traditional income stream are viewed by some lenders as a higher risk. If you fit one of these categories, you will have a smaller pool of lenders available to you but can still benefit from competitive rates with the right lender.

Get matched with an expert maisonette mortgage broker today

Due to the additional complexities associated with a maisonette mortgage it’s always best to consult with a  broker who has experience in this area. We work with advisors who specialise in sourcing niche mortgage products from across the market.

Our broker matching service will put you in touch with a mortgage broker who has extensive knowledge of the maisonette market. They will guide you through the application process and associated paperwork to ensure you are fully apprised of all details of your loan and your lease or freehold.

Call today on 0808 189 0463 or enquire online to arrange a no-obligation chat.

Ask a quick question

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different Property Types. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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