What is a Multi-unit Freehold Block?
A multi-unit freehold blocks (MUFB) is a single freehold property which has been split up into multiple self-contained units. Each unit will have separate entrances, kitchen, and bathroom areas, and they can have shared areas such as hallways and outdoor spaces.
Some common examples of an MUFB include:
- A purpose built blocks of flats
- Houses converted into flats
What are the differences between a HMO and MUFB?
The main differences between HMOs and MUFBs are that MUFBs are self-contained units that have individual AST agreements in place and separate entrances, kitchens, and bathroom spaces.
Houses in multiple occupation (HMOs) are residential properties that are shared by 3 or more people, from at least 2 or more households. The tenants have individual rooms but share facilities such as a kitchen, communal rooms, or bathroom.
For more information on HMOs and the benefits of having one, click here: https://www.westoneloans.co.uk/landlord-hub/a-beginners-guide-to-hmos
Benefits of a MUFB
- High rental yield – Having multiple tenancies increases potential income opportunities compared to single occupied properties. Generally, a MUFB will have a higher rental yield than a traditional single occupancy buy-to-let property.
- Lower risk of Void Periods – As there are multiple tenancies running during the same period, the loss of a tenant will not be as detrimental in comparison to single-unit buy-to-let properties. Although the landlord will experience a dip in income, the landlord will still receive rent from other units within the MUFB.
- Units can have separate titles created – Landlords may decide to split the titles of individual units and sell each unit individually.
- No License required – Unlike HMOs, MUFBs do not require licenses meaning landlords do not have to worry about any required fees or set up charges with the local authorities.
