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Categories: buy to let mortgages | guides | buy to let mortgage guides
Multi-unit freehold blocks are a specialist type of property offering potentially high yields to landlords and property investors.
Investing in an MUFB (sometimes called an MUB) could help you diversify your property portfolio or get you started in a potentially very profitable area of the private rental sector property market.
We take a look at what an MUFB is and how to get finance to invest in one – which are specialist broker team can help you with.
What is a Multi-Unit Freehold Block?
A Multi-Unit Freehold Block (MUFB) is a single freehold property that contains multiple, separate, self-contained residential units—typically flats or apartments. They are sometimes called MUBs (Multi-Unit Blocks)
They differ from an HMO (House in Multiple Occupation), where tenants share facilities such as kitchens or bathrooms. The individual units in an MUFB are completely self-contained and independently let.
Key characteristics:
- Purpose-built or conversions.
- Separate assured shorthold tenancy agreements.
- A number of houses that are under one freehold.
- Separate entrances to each property.
- Can have a common area, such as stairs, hallway, or garden.
Common examples include converted Victorian townhouses, purpose-built blocks, or mixed-use buildings with retail units below and residential above.
Why invest in an MUFB?
Investing in a Multi-Unit Freehold Block can offer several strategic advantages to landlords and property investors:
Higher rental yields
With multiple rental incomes from a single title, MUFBs can generate significantly higher yields than single-tenancy properties. As changes in regulation and tax have evolved in the private rental sector more and more landlords are looking to maximise yields, so this is a key area of potential interest.
Diversified income stream
Void periods in one unit don’t affect income from others—this spreads risk and improves cash flow stability. So, even if you cannot immediately find a replacement tenant for one of the units in your block if they move out, you may still be able to achieve a good level of profit in the transitional period.
Lower acquisition costs
An MUFB is typically a building of reasonable size and therefore cost. However, buying a block of flats on one freehold can be more cost-effective (on a per-unit basis) than buying several flats individually.
Fewer management complexities
With all units under a single freehold, you retain full control over the block—no leasehold issues or service charges imposed by third parties.
Furthermore, unlike an HMO, tenants are not sharing any living spaces, which avoids any co-habiting quibbles or arguments and makes clear where responsibilities for the property lies on the side of the tenants.
Key considerations when buying an MUFB
Before investing in a Multi-Unit Freehold Block, be sure to consider the following:
Planning and building regulations
Ensure that all units are legally compliant and have the necessary consents (especially for conversions). Check local authority requirements and licensing.
Mortgage finance
MUFBs are a specialist asset class, and many high-street lenders do not offer suitable mortgages. You’ll need to work with a lender that understands this property type. Our broker team can help you by undertaking this research on your behalf and help you get the finance you need.
You will need a deposit of at least 15%, but the options are very narrow. This is likely to affect how competitive the interest rate is. You will have more borrowing options with a deposit of 20%-25% or more.
You can invest in personal name or through a limited company and the difference in mortgage interest rates will typically be negligible because this is already a more complex area of borrowing.
There are sometimes instances where smaller blocks (e.g. three to four units) can be financed against a lender’s standard mortgage range, which can positively impact rate. Your advisor at Commercial Trust will naturally investigate the most cost effective product for your case.
Valuation approach
Lenders may value the property differently—either as a single investment property (bricks-and-mortar value) or based on its income potential (investment yield basis). This can impact the loan amount available.
Management strategy
Decide whether you’ll manage the block yourself or employ an agent. You may need to provide communal maintenance, organise insurance, and comply with fire safety regulations.
Summary
Multi-Unit Freehold Blocks are an attractive and often underutilised property type for landlords seeking to maximise rental income and diversify their portfolios. They offer strong yields, spread risk, and provide operational efficiencies—but require the right mortgage solution to unlock their full potential.
How Commercial Trust can help
At Commercial Trust, we specialise in arranging buy to let mortgages for complex property types—including Multi-Unit Freehold Blocks.
We work with a wide range of specialist lenders who:
- Accept MUFBs with up to 20 units
- Offer higher loan-to-value (LTV) options than you may find elsewhere
- Are comfortable with both experienced and first-time landlords
- Understand the income potential and valuation approaches for this type of property
- Allow interest-only or capital repayment terms
Whether you're expanding your portfolio or making your first MUFB investment, our expert advisers will guide you through every step—from sourcing the right mortgage to managing lender requirements.
Looking to invest in an MUFB?
Speak to the experts at Commercial Trust. Our specialist brokers are here to help you secure a tailored mortgage that suits your goals. Call on the Freephone number above or enquire online.
