Historical mortgage lender requirements: flying freehold

Lender requirements are date-specific. The fact that your original lender accepted the flying freehold on your completion date does not mean the wider panel accepted it then, or accepts it now. Two separate questions arise from the same transaction: what did your own lender’s written Part 2 instructions require on the day, and what should you reasonably have been told about the title and its implications for mortgageability across the wider market, and therefore for a future sale? The archive retrieves the date-stamped record actually in force, so both questions can be examined from the historical record rather than reconstructed from today’s rules. It is also worth establishing that the two lending decisions concerned materially comparable circumstances: the extent of the flying freehold element, the rights and covenants in place, any indemnity cover and the valuer’s assessment may differ between the two transactions, and a difference in outcome is not necessarily a difference in lender policy.

Where the conveyancer also acted for the mortgage lender, they had professional obligations to both clients. The Law Society Conveyancing Protocol, which CQS-accredited firms follow, assumes the conveyancer acts for the lender as well as the buyer, and the CQS Core Practice Management Standards require accredited firms to maintain documented procedures for acting for lenders. The lender’s written instructions and the advice owed to the buyer therefore create separate but related lines of enquiry, and both are assessed against the requirements in force on the material date, not against today’s Handbook.

A breach of the lender’s written instructions arises where the conveyancer did not comply with the specific Part 2 requirements the lender published for flying freeholds as in force on the material date, for example completing without required mutual rights of support and repair or without a required indemnity policy. A failure of advice to the buyer is a different question: even where the specific lender permitted the flying freehold, the buyer may have needed to be told about characteristics of the title that could affect mortgageability across the wider lending market, and therefore practical marketability on a future sale. Whether either line of enquiry amounts to breach in a particular case is a matter for legal analysis; the historical record establishes the factual baseline both depend on.

You receive the complete Part 2 record as in force on your chosen date whether or not it contains express wording on this topic. If it does not, the record evidences that too: what the lender’s published instructions did and did not expressly address on that date. That is only provable from the complete record, which is why the report is not filtered to a topic. Part 2 is the lender-specific component of the instruction framework: a transaction investigation must also consider the general Part 1 instructions applicable at the time, the mortgage offer and its conditions, and any case-specific correspondence. The report establishes what the retained Part 2 record contains; it is not the complete instruction file. What any absence of express wording meant for a particular transaction is a separate question of analysis, and where no express topic wording is identified, that should not be treated as establishing that the lender accepted the circumstance without restriction.

The Market Context Report reproduces, for the single date you specify, the recorded requirements on this topic of every other lender for which Lexsure holds an applicable record. Some of those lenders will have expressly addressed flying freeholds on that date; others will not, and for some lenders no applicable record exists for that date. The report shows each lender’s own recorded wording as it stood; it does not classify, grade or interpret it, and where no express wording is identified that is reported as such. Where no express topic wording is identified, that should not be treated as establishing that the lender accepted the circumstance without restriction. Assessing what the contemporaneous market position means for a particular transaction is analysis, and is undertaken within the Tier 3 and Tier 4 reports.

Yes. Individual lenders amend their Part 2 requirements over time: thresholds are tightened or relaxed, referral or indemnity requirements are added or removed, and required title rights or covenants change. Lexsure’s date-stamped historical records identify substantive topic-level changes for the lenders represented in the archive, which is why a lender’s current published policy is not evidence of what it required on an earlier transaction date. The frequency of change shows only that requirements evolved; the direction and consequence of any particular change require separate analysis.