Heron Financial arranged a £45,000 mortgage with NatWest Intermediary Solutions at an initial fixed rate of 4.39% on a 2-year fix for a solo self-employed buyer purchasing one of two flats on a single freehold in Newcastle upon Tyne. The transaction required title splitting and the creation of new leases for both flats. The mortgage sat at approximately 75% LTV against a £60,000 purchase price, with completion in December 2025.
The client
The client was a British self-employed sole trader with 18 years of trading history, buying solo. They were purchasing two flats on a single freehold in Newcastle upon Tyne, with this case covering one of the two flats. The transaction structure required the existing single freehold title to be split and new leases to be created for each flat as part of the completion process. The client had built a £15,000 deposit from personal savings against the £60,000 purchase price.
The case at a glance
- Buyer: Solo applicant, British national, self-employed sole trader (18 years trading)
- Income: £19,000 salary drawings plus £30,000 net profit (both most recent and prior year)
- Property type: Purpose-built flat (one of two flats on a single freehold)
- Location: Newcastle upon Tyne
- Purchase price: £60,000
- Deposit: £15,000 from personal savings (~25%)
- Loan amount: £45,000
- LTV: Approximately 75%
- Lender: NatWest Intermediary Solutions
- Product: 2-Year Fixed Rate
- Initial fixed rate: 4.39%
- Repayment method: Capital and interest
- Notable feature: Title splitting and new lease creation managed alongside the mortgage process; one of two flats on the same freehold purchased by the same client
The challenge
Three features made this case substantially more demanding than a standard small-flat purchase.
1. Title splitting and new lease creation. Where a property contains multiple flats but exists under a single freehold title, dividing the property into separate flat units requires legal restructuring. Each flat needs its own leasehold title, with appropriate lease terms covering length, ground rent, service charges, alterations, lease extensions and the relationship between leaseholders and freeholder. This is a legal process that runs in parallel with the mortgage application. The leases need to be drafted, reviewed and ultimately accepted by the lender as security for the loan.
Lenders are not all equally comfortable with cases involving lease creation. Some prefer to lend only on long-established leases where the terms are already settled. Others, including NatWest, will work with cases where new leases are being put in place, provided the lease terms are reviewed and meet lender requirements. In this case, the Heron team and the conveyancing solicitors worked through several iterations of the lease drafting, including specific amendments requested after lender review, to arrive at lease terms acceptable to NatWest.
2. Small loan size. At £45,000, the loan sat at or near the minimum loan size for several mainstream lenders. Not every lender writes mortgages this small, and the shortlist narrows further when title splitting and new lease creation are involved. The right placement matched the small loan size to a lender that would also handle the legal structure cleanly.
3. Self-employed sole trader income. With 18 years of trading history and a settled net profit pattern, the underlying income evidence was strong. Sole trader income is evidenced through HMRC tax calculations (SA302s) and tax year overviews, plus an accountant’s reference where required. Long trading histories give lenders a stable view of the income; 18 years is well above any typical minimum.
During the application, the rate available on the lender portal moved from the recorded initial rate of 4.39% to an amended figure of 4.65%. Rate amendments during application processing can occur when products are repriced or withdrawn during a longer-than-usual application timeline, particularly on cases with legal complexity like this one. The Heron team monitored the position throughout.
How Heron Financial approached the recommendation
The Heron adviser worked through affordability against the client’s recorded self-employed income (salary drawings plus net profit), confirmed the deposit position, and matched the case to a lender comfortable with the small loan size, the title splitting work and the self-employed sole trader income picture. NatWest Intermediary Solutions, the broker channel of NatWest, was the right match across all three constraints.
Heron Financial managed the application through underwriting, valuation, EPC requirements, lease drafting and amendment reviews, and the rate change on the lender portal. The team also kept the seller’s solicitors moving on the title-splitting and new lease creation throughout the process.
The outcome
The case completed in December 2025, just before year-end. The client took ownership of the first of the two flats they were purchasing on the same freehold, with the new lease in place and the mortgage running cleanly with NatWest.
What this means for buyers in a similar position
For buyers acquiring multi-unit properties on a single freehold, the mortgage and the legal restructuring run in parallel and each shapes the other. A few practical points worth knowing.
Lender appetite varies for new lease creation cases. Some lenders only accept established leases. Others work with cases where new leases are being drafted, provided the lease terms meet their requirements. Lender choice is more important on cases like this than on standard purchases.
The conveyancing side is often the longer part of the case. Title splitting and new lease creation take time. The mortgage application itself can be ready while the legal restructuring is still being finalised. Cases of this kind benefit from broker coordination between the lender’s underwriting team and the conveyancing side.
Small loan size narrows the lender field. Below £50,000 or so, not every lender competes. For multi-unit property purchases where one flat may have a small loan and another a larger one, the right lender choice can differ between the two flats even when the buyer is the same person.
Rate amendments during application are possible. When applications run longer than a typical purchase timeline, rate movements during the case can occur. Working with a broker who monitors the lender position throughout the case is what protects the borrower from surprises at completion.
Self-employed sole trader income with a long trading history is well-treated. Eighteen years of trading, as in this case, is far above typical lender minimums and produces a comfortable underwriting position for lenders. Income is evidenced through HMRC tax calculations and accountant references where required.
FAQs
Can I get a mortgage to buy two flats on one freehold?
Yes, though the case is more complex than a standard purchase. The title typically needs to be split and new leases created for each flat, which runs in parallel with the mortgage application. In this Heron Financial case, a self-employed buyer purchased one of two flats on a single freehold in Newcastle upon Tyne, with NatWest Intermediary Solutions providing the mortgage and the legal restructuring handled alongside.
What is title splitting?
Title splitting is the legal process of dividing a single property title into multiple separate titles, typically used when a freehold containing multiple units needs to be restructured so each unit has its own leasehold title. The process involves drafting new leases, registering the new titles with Land Registry, and ensuring the lease terms meet lender requirements.
Will lenders accept a mortgage on a newly created lease?
Some lenders will, some won’t. Lender appetite varies for cases involving new lease creation. Lease terms need to meet lender requirements covering length, ground rent, alterations and other standard provisions. In this Heron Financial case, NatWest accepted the new lease subject to specific amendments to the draft lease terms.
Is NatWest good for self-employed sole trader mortgages?
NatWest Intermediary Solutions is the broker channel of NatWest, one of the major UK mainstream lenders, and is regularly considered for self-employed sole trader cases including those with long trading histories. Heron Financial assesses every case on its merits and selects a lender based on affordability, product pricing, criteria fit and service standards at the time of application.
Can mortgage rates change during the application process?
Yes, in some circumstances. Products can be repriced or withdrawn while an application is in process, particularly on cases with longer-than-usual timelines such as those involving legal complexity. Working with a broker who monitors the lender position through the case helps manage this.
