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Sometimes land or property owners may opt to transfer all or a portion of these specific assets for a variety of reasons. It’s typical to sell a piece of land from a big garden to a neighbour. Splitting a sizable parcel of land with several buildings on it is similar. In this post, we will discuss the process of splitting a property into two titles UK, and what you need to know.
What is Splitting A Property Into Two Titles UK + How does it work?
Title deeds have been used for many years. They are official paper records that list all previous owners of a building or piece of land and attest to the current owner.
They could be contracts negotiating a sale, leases, mortgages, conveyances, and wills. Transfer of part is another name for the act of dividing title deeds.
Titles and the act of title splitting have been around for a great number of years. It’s essentially when you purchase a piece of land or property, and after permission has been given you split the land or property up into smaller sections to be rented out or sold. It’s an effective and profitable way to make money out of property in the 21st century.
If you own a Leasehold property it means that the land is owned by another party. As a result, you are powerless to decide what to do with the property the building is on.
If you own a freehold property it means when you own a property freehold, you are the owner of both the building and the land. It gives you the freedom to make decisions regarding the home or land, such as dividing title documents.
Pros of property splitting in the UK
Increased value
When you take part in splitting a property into two titles UK there is an opportunity to add value to your property because now there is more room which can be converted into bedrooms or bathrooms for example.
Opportunity for rental income
You could rent out an additional room which added more income through renting, and this would add up over time, creating a stable stream of residual income from your property.
Ability to sell one portion of the property
Of course, one of the main and obvious benefits is the fact that you can sell one portion of the property for a profit.
Cons of property splitting in the UK
Now we will explain some cons of splitting a property into two titles UK. Just like the pros, there are a number of different cons associated with it.
Potential decrease in property value
One thing that some landowners and property developers might overlook is the fact that your property could decrease in value. Now of course, this is completely subject to a number of different factors, and it is not clear if it will decrease or increase, it’s just something to pay attention to.
Added costs and fees
Legal fees, surveyor fees, and other charges can quickly pile up when dividing up property. Sometimes the costs of separating a property outweigh the benefits, especially if the property is tiny or has a low value.
Conflicts
Conflicts resulting from property division may arise between neighbours and other parties, such as freeholders and leaseholders.
It might take a long time and money to settle disagreements over things like property lines, access to shared facilities, and maintenance duties.
Potential decrease in value
If a property is divided into several smaller pieces, this could potentially lower the value of the entire property. This may lessen the possible return on investment or make it more difficult to sell the home in the future.
Legal Requirements for property splitting in the UK
Obtaining planning permission
One aspect of Splitting A Property Into Two Titles UK is the planning permission you will need to obtain in order to do this successfully.
Following building regulations
Another aspect to take into consideration is building regulations.
You need to make sure that you are following the approaches to building regulations before or during the process of Splitting A Property Into Two Titles UK.
Registering the new title with the Land Registry
The final stage of Splitting A Property Into Two Titles UK would of course be registering your new title with the land registry.
You will have to remember that they will only approve it if they think it is necessary, so be aware.
Steps to split your property into two titles
Conducting a feasibility study
Here are the steps for conducting a feasibility study:
- Step One: Conduct a Preliminary Analysis.
- Step Two: Prepare a Projected Income Statement.
- Step Three: Conduct a Market Survey.
- Step Four: Plan Business Organization and Operations.
- Step Five: Prepare an Opening Day Balance Sheet.
- Step Six: Review and Analyze All Data.
Engaging professionals
The hiring of professionals for the project is going to be another necessity as well, as you can’t allow for any error when you are going through the process of Splitting A Property Into Two Titles UK.
You will want to make sure you have sorted this all out before you begin the property splitting process as it can get quite overwhelming further down the line.
Physically dividing the property
During the most important process, you will need to divide the property into separate sections for tenants or other uses. Taking into account water sources, electric lines, sockets and other utilities will be a really hard task and not one to be taken lightly.
Registering the new titles with the Land Registry
This process can only be started once you have had your initial property splitting approved, and essentially it’s the last step you take when splitting a property into two titles UK.
Conclusion
As you can see the process of splitting a property into two titles UK is a long and delicate one, and certainly not one to be taken in a lighthearted sort of way. This is why you should most definitely consult legal professionals.
At Lawdit we provide all kinds of different legal help to assist clients with cases, concerns or questions they may have. If you’re wondering about splitting a property into two titles UK and have some questions about the process then our team of friendly experts at Lawdit would be happy to help.
Simply send us a message on our contact page: Lawdit Contact. Alternatively, if you want a free consultation, please go here: Lawdit Free Consultation.
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References
- United Kingdom (Wikipedia.ORG)
- Leasehold property and Freehold property (GOV.UK)
- Planning permission & when you need it. (GOV.UK)
Written By Inam Ali – Senior Solicitor
Inam Ali is a commercial property solicitor with over 15 years’ experience in dealing with a wide range of property matters on a nationwide basis. This includes commercial leases, lease extensions, and both commercial leasehold and freehold sales and purchases.
