For landlords, there’s a new property type on the block – literally! Multi-Unit Freehold Blocks (MUFBs) are becoming a real hot ticket for investors looking to boost their returns.

What’s the Deal with MUFBs?

Simply put, a MUFB is a building with multiple apartments or flats, where the landlord owns the entire building – freehold ownership, meaning they own the land and the structure. This gives them complete control, unlike leasehold properties where they might only own the apartment itself.

Why Are Landlords Loving MUFBs?

Higher Yields, Lower Risk: Landlords are flocking to MUFBs because they typically deliver bigger rental returns compared to single-unit properties. Plus, because MUFBs are usually in high demand, they’re less likely to sit empty for long, minimizing the risk of lost income.

The Numbers: According to Shawbrook Bank, a major lender for landlords, there’s been a 14% jump in landlords interested in investing in MUFBs in 2024 compared to last year. And the size of the mortgages landlords are applying for has increased by 37%.

The Trend is Spreading: The MUFB craze isn’t limited to just one region. While Scotland is proving popular with landlords looking for these types of properties, the North West of England is also seeing a surge in interest.

Looking Beyond MUFBs: This shift towards higher-yielding properties isn’t just about MUFBs. Landlords are also increasingly looking into Houses in Multiple Occupation (HMOs) and semi-commercial properties. These property types offer similar advantages, like bigger rental returns and better protection against economic challenges.

Where Do You Go From Here?

If you’re thinking about adding a MUFB or similar property to your portfolio, it’s a good idea to chat with a mortgage broker. They can help you understand the ins and outs of these investments and guide you towards the best options for your situation.