Complex freehold purchase case study: using an SPV and specialist lending

When a property’s legal structure is unusual, the mortgage process can become more about title and legal acceptability than affordability. This case study explains how a residential purchase involving a complex freehold/ownership arrangement was progressed by using the right structure and approaching a lender that could assess it properly.

The client’s situation

The client already owned the first-floor flat within a residential building and wanted to purchase the ground floor flat beneath it.

The long-term goal was straightforward: secure ownership of the building in a way that offered greater control and flexibility for the future. However, the way the property was held and how the building was divided created legal and lending complications.

The purchase also needed to complete quickly. A tight seller timetable meant the mortgage had to be arranged without unnecessary delay.

The challenge

Even where borrowers are financially well placed, lenders often apply strict internal requirements around:

• how the property is held on title
• how the building is divided legally
• whether the lender can clearly understand the rights being granted
• whether the structure is compatible with their standard legal and valuation approach

In this case, the freehold arrangement made the application difficult for mainstream lending routes. The previous broker’s submission was rejected because the lender could not progress the case in the form it was presented.

The solution: restructure the ownership for mortgageability

The key step was to use a Special Purpose Vehicle (SPV).

An SPV is a limited company set up specifically for holding property. In complex ownership scenarios, it can make the overall structure easier for lenders to assess because the property is held within a defined legal framework rather than directly by an individual.

Once the SPV approach was agreed, the next part of the solution was to work with the solicitor to create a new lease structure.

This helped divide the building in a way that was more lender-friendly, improving clarity around the legal interests being mortgaged and reducing the barriers that had stopped the earlier application.

Why a specialist lender mattered

With the structure addressed, the case was then approached to a specialist lender experienced in non-standard residential arrangements.

Specialist lenders are often better placed to review cases where the legal setup falls outside typical high-street parameters. In this instance, the lender was able to assess the proposal once the SPV and lease structuring were in place.

Deal details (example of the outcome)

The mortgage was arranged on the following basis (as an example of what was achieved in this case):

• Borrowing: £350,000
• Purchase price: £475,000
• Loan-to-value (LTV): 75%
• Term: five-year fixed
• Rate: 4.86%
• Structure: lending arranged through a new SPV with leases in place

Note: This is a case study example. Your rate, LTV and product availability will depend on your circumstances and lender criteria.

How the process was managed

Complex cases succeed when the moving parts are tightly coordinated. This application required close alignment between:

• the client
• the solicitor handling the legal restructuring
• the lender’s underwriting team
• our broker team’s case management to ensure documentation matched lender requirements

Because the purchase had a strict timeframe, the approach focused on staying ahead of likely underwriting questions and ensuring the legal paperwork was prepared in a way that reduced back-and-forth.

The outcome

The purchase was able to proceed with a mortgage offer after the legal structure was made more acceptable to the lender.

What was achieved (in this case):

• mortgage offer secured at 75% LTV
• the complex freehold/ownership position resolved through SPV + lease creation
• a five-year fixed arrangement to support longer-term planning
• a mainstream rejection turned into a specialist solution once the structure was addressed

What this case shows for home buyers

If you’re buying a property where the legal setup is less straightforward—such as unusual freehold/lease arrangements, complex title structures, or a building division that doesn’t fit standard lending patterns—this case highlights a practical point:

• the right outcome often depends on getting the structure mortgageable, not just meeting affordability
• specialist lenders can be better aligned to cases where legal acceptability is the main hurdle

For home buyers facing a “too complicated” situation, the route forward may be available—particularly when the ownership structure is reviewed early and the mortgage application is prepared with the lender’s requirements in mind.