Selling a House with a Flying Freehold

Flying freeholds are more common than many homeowners realise. They are found throughout England and Wales, particularly in Victorian and Edwardian terraced houses, converted properties, and older buildings in town centres. According to HM Land Registry data, a significant number of registered freehold titles include elements that extend beyond the boundary of the owner's land — the defining characteristic of a flying freehold.

If you are selling a property with a flying freehold, the good news is that it is entirely possible to achieve a successful sale. The challenge is that buyers, solicitors, and mortgage lenders treat flying freeholds with extra caution because of the legal complications they create. This guide explains what those complications are, how to address them before you market your property, and what you can do to keep the sale moving smoothly.

What is a flying freehold?

A flying freehold arises when part of a freehold property extends over (or under) land that belongs to a neighbouring freeholder. Unlike a leasehold flat, where the building is owned by a single freeholder and each flat is held on a lease, a flying freehold involves two or more separate freehold titles where part of one sits above or below another.

The term "flying" refers to the fact that part of the property is suspended in the air above someone else's land, rather than sitting directly on its own plot. A creeping freehold (or subterranean freehold) is the reverse — part of the property extends underground beneath a neighbour's land, such as a cellar running under an adjoining house.

Common examples of flying freeholds

Flying freeholds appear in a wide range of property types. Some of the most common scenarios include:

• Terraced houses with rooms above shared passageways. Many Victorian and Edwardian terraces have a rear access passageway at ground level that runs between two houses. First-floor rooms often extend above this passageway, creating a flying freehold over the neighbour's land.
• Converted houses split into separate freeholds. When a house is divided horizontally (for example, the ground floor sold as one freehold and the upper floors as another), each property depends on the structural support of the other. This is common in maisonettes that have been sold as separate freeholds rather than on leasehold terms.
• Bay windows and extensions overhanging a neighbour's land. A first-floor bay window or an extension that projects beyond your boundary line and over your neighbour's property creates a flying freehold element.
• Properties above shops or commercial premises. In town centres, it is common for the upper floors of a building to be a separate freehold from the ground-floor commercial unit. If the upper property extends over any part of the commercial unit's land, a flying freehold exists.
• Cellars extending beneath a neighbouring property. Older properties sometimes have cellars that run under the adjoining house or pavement. This creates a creeping freehold, which is treated in the same way as a flying freehold for legal and lending purposes.

Why flying freeholds cause legal complications

The fundamental problem with a flying freehold is that English property law was not designed to handle freehold ownership of airspace above another person's land. The legal framework works well when freehold ownership relates to land and everything built on it. When ownership is split vertically (as with leasehold flats), the lease and the relationship between freeholder and leaseholder provide the legal structure for mutual obligations. But when two freeholders each own part of the same building, there is no automatic mechanism to enforce those obligations.

The enforceability problem

Under English law, positive covenants — obligations that require someone to do something, such as repair a roof or maintain a supporting wall — generally do not bind successors in title to freehold land. This principle was established in Austerberry v Oldham Corporation (1885) and confirmed by the House of Lords in Rhone v Stephens (1994).

In practical terms, this means:

• If your neighbour agreed in a deed to maintain the floor that forms your ceiling, that obligation may not be enforceable against a future buyer of your neighbour's property.
• You cannot compel a successor owner to carry out repairs to the parts of their property that provide support, shelter, or protection to yours.
• Even if the original conveyance included mutual covenants, those covenants may have no legal effect once the property changes hands.

This enforceability gap is the primary reason why lenders, solicitors, and buyers approach flying freeholds with caution. It is also why indemnity insurance is almost always required.

How mortgage lenders view flying freeholds

Mortgage lenders assess flying freeholds on a case-by-case basis, but most follow guidance set out in the UK Finance Lenders' Handbook. The Handbook directs solicitors acting for lenders to report any flying freehold element and to obtain specific protections before completion. The key factors lenders consider are:

Percentage of floor area

The most important factor for most lenders is what proportion of the property's total floor area is affected by the flying freehold. Typical lender thresholds are:

These thresholds vary between lenders. Some building societies and specialist lenders have more flexible criteria, while others are stricter. Your buyer's mortgage broker should be able to identify lenders willing to proceed once the extent of the flying freehold is known.

What lenders require

Before approving a mortgage on a property with a flying freehold, lenders typically require:

• Flying freehold indemnity insurance — a policy that protects the lender (and usually the buyer) against loss arising from the inability to enforce maintenance and repair obligations relating to the flying freehold element.
• A satisfactory valuation — the lender's surveyor must confirm the property's value, taking the flying freehold into account.
• Confirmation of the extent — the solicitor acting for the lender must report on the proportion of the property affected and the nature of the flying freehold.

Flying freehold indemnity insurance

Indemnity insurance is the standard solution to the legal risks posed by a flying freehold. It provides financial protection if the obligations relating to the flying freehold element cannot be enforced against a neighbouring owner — for example, if the neighbour refuses to repair a structural wall or floor that supports your property.

What the policy covers

A typical flying freehold indemnity insurance policy covers:

• The cost of carrying out repairs that the neighbouring owner is unable or unwilling to perform
• Loss of value to the property if the flying freehold element becomes defective and cannot be remedied
• Legal costs incurred in attempting to enforce obligations against the neighbouring owner
• The lender's interest in the property (most lenders require the policy to note their interest)

Cost and availability

Flying freehold indemnity insurance is a one-off premium (not an annual charge) and typically costs between £20 and £200, depending on the property value and the extent of the flying freehold. The policy remains in force indefinitely and passes to future owners of the property.

Your solicitor will arrange the policy as part of the conveyancing process. It is usually paid for by the seller, although this is a matter of negotiation. Obtaining the insurance before you market the property removes a potential delay from the transaction and signals to buyers that the flying freehold has been properly addressed.

Deeds of covenant and mutual obligations

While indemnity insurance provides financial protection against the risk that obligations cannot be enforced, a deed of covenant attempts to create enforceable obligations in the first place. A deed of covenant for a flying freehold typically covers:

• Repair and maintenance obligations. Each party agrees to keep their part of the building in good repair, particularly the structural elements that provide support or shelter to the other property.
• Rights of access. Each party grants the other reasonable access to carry out inspections, maintenance, and repairs to the parts of the building that affect the flying freehold.
• Insurance obligations. Each party agrees to insure their property (including the flying freehold element) to its full rebuild value and to produce evidence of insurance on request.
• Indemnity provisions. Each party agrees to include a covenant in any future sale requiring the buyer to enter into the same obligations — creating a chain of personal covenants that, while not binding in rem, provide at least a personal obligation on each successive owner.

A deed of covenant does not entirely solve the enforceability problem (since positive covenants still do not run with freehold land), but it is the best practical solution available and is viewed favourably by lenders and surveyors. If your property has a flying freehold and no deed of covenant is in place, it may be worth discussing with your neighbour whether one can be created before you sell.

How much of the property can be a flying freehold?

The proportion of the property affected by the flying freehold is critical to both its value and its saleability. There is no legal maximum, but lenders impose practical limits that effectively determine how easily the property can be sold. As noted above, most mainstream lenders draw the line at 15 to 25 per cent of the total floor area.

The extent is typically assessed by the lender's surveyor during the valuation. They will examine the floor plans and determine what proportion of the habitable floor area sits above (or below) the neighbouring owner's land. Your solicitor will also report on this to the buyer's lender based on the title plan and any physical inspection.

If the flying freehold accounts for a large proportion of your property, you may wish to obtain a surveyor's report before marketing to give prospective buyers and their lenders accurate information from the outset. RICS (the Royal Institution of Chartered Surveyors) publishes guidance on the valuation of properties with flying freeholds, and a surveyor following this guidance can provide an authoritative assessment.

Effect on property value

The impact of a flying freehold on property value depends on several factors:

• Extent of the flying freehold. A small element (such as a single room above a passageway) has less impact than a property where an entire floor overhangs the neighbouring land.
• Availability of insurance and covenants. A property with indemnity insurance and a deed of covenant in place will be valued more favourably than one without.
• Condition of the flying freehold element. If the overhanging or underlying structure is in good repair, the risk to the buyer is lower.
• Local market conditions. In areas where flying freeholds are common (such as Victorian terraces in northern English towns), buyers and local valuers may be more familiar with them and less likely to apply a significant discount.
• Mortgage availability. If the flying freehold restricts the range of lenders willing to offer a mortgage, the reduced buyer pool can itself depress the price.

RICS guidance suggests that valuers should consider the flying freehold as a material factor in their assessment. In practice, a well-managed flying freehold with insurance in place may result in little or no discount, while a larger one without protection could reduce the value by 5 to 15 per cent.

Disclosing a flying freehold: the TA6 form and conveyancing enquiries

As a seller, you have a legal obligation to disclose known defects and issues with your property. A flying freehold should be disclosed on the property information form (TA6) and addressed in the title information your solicitor provides. The relevant areas of the TA6 include:

• Section 1 (Boundaries). If the flying freehold means your property extends beyond the boundary of your land, this should be noted.
• Section 3 (Rights). Any rights of access, easements, or other rights granted to or by your neighbour in connection with the flying freehold should be disclosed.
• Section 7 (Warranties and indemnity insurance). If flying freehold indemnity insurance is already in place, you should confirm this and provide a copy of the policy.

The buyer's solicitor will raise conveyancing enquiries specifically about the flying freehold, typically asking about the extent, any deed of covenant, maintenance history, and insurance arrangements. Having clear answers and supporting documents ready will prevent unnecessary delays at the enquiry stage.

For a full list of the documents your solicitor will need, see our guide on documents needed to sell a house.

Practical steps for selling a property with a flying freehold

If you are preparing to sell a property with a flying freehold, taking the following steps before you market will help ensure the smoothest possible transaction:

1. Confirm the flying freehold exists and its extent. Order your title plan from HM Land Registry (£3 online) and check whether the plan shows any part of your property extending beyond your land boundary. If in doubt, ask your solicitor to review the title.
2. Check whether a deed of covenant is already in place. Review your title deeds or ask your solicitor to check. If a deed of covenant was created when the property was originally built or converted, it may still be in effect.
3. Obtain indemnity insurance. Ask your solicitor to arrange flying freehold indemnity insurance before you list. Having the policy in place when the buyer's solicitor raises enquiries eliminates a common source of delay.
4. Consider creating a deed of covenant. If no deed of covenant exists and your neighbour is cooperative, your solicitor can draft one. This is not always possible (the neighbour is under no obligation to agree), but if it can be arranged, it strengthens the property's position with lenders and buyers.
5. Complete the TA6 thoroughly. Disclose the flying freehold clearly and provide all relevant documentation — title plan, deed of covenant (if any), indemnity insurance policy, and any surveyor's report.
6. Brief your estate agent. Make sure your agent knows about the flying freehold so they can address any buyer concerns early and ensure the property is marketed to buyers whose lenders are likely to proceed.

Flying freeholds in maisonettes and converted properties

Flying freeholds are particularly common in maisonettes and properties that have been converted from a single dwelling into two or more separate units. When a house is split horizontally and the upper and lower parts are sold as separate freeholds (rather than on leasehold terms), the entire upper property is effectively a flying freehold — it sits above the lower property's land.

This is why many lenders prefer properties in converted buildings to be held on leasehold terms rather than as separate freeholds. A leasehold structure provides the legal framework (through the lease) for mutual obligations, building insurance, and maintenance contributions that a freehold structure lacks.

If you own a freehold maisonette that constitutes a large flying freehold, your solicitor may advise exploring whether the property could be converted to a leasehold arrangement. This is a significant step that requires the cooperation of the other freeholder, but it can resolve the flying freehold issue permanently and make the property significantly easier to sell.

Alternatives to indemnity insurance

While indemnity insurance is the most common and practical solution, there are other approaches to managing the legal risk of a flying freehold:

• Conversion to leasehold. As mentioned above, converting the freehold interests into a leasehold structure (with a newly created head lease) eliminates the flying freehold entirely. This requires legal work and the agreement of all parties, but it provides the most complete solution.
• Mutual deed of covenant with chain of indemnity. A robust deed of covenant that includes a clause requiring each future buyer to enter into the same obligations creates a practical (if not technically binding in rem) chain of enforcement. Combined with indemnity insurance, this is the most common approach.
• Rentcharge. In rare cases, a rentcharge can be used to create an enforceable obligation in relation to freehold land. The Rentcharges Act 1977 restricts the creation of new rentcharges, but an "estate rentcharge" created to secure positive covenants is one of the permitted exceptions. This is a specialist solution and not commonly used.

Sources

• RICS (Royal Institution of Chartered Surveyors) — Valuation of properties affected by flying freeholds guidance
• UK Finance Lenders' Handbook — ukfinance.org.uk
• HM Land Registry — Practice Guide 25: Flying freeholds and land above and below other land — gov.uk
• The Law Society — Flying freeholds and conveyancing practice notes — lawsociety.org.uk
• Rhone v Stephens [1994] 2 AC 310 — House of Lords (enforceability of positive covenants)
• Rentcharges Act 1977 — legislation.gov.uk
• Law Commission Report No. 327 — Making Land Work: Easements, Covenants and Profits à Prendre (2011)
• Land Registry — Title plan and register services — gov.uk

Frequently asked questions