Using title splitting to develop a property portfolio

Title splitting is a powerful strategy for property developers looking to maximise returns on their investments. But what exactly is title splitting, and how can you use it to boost the ROI of your development projects?

In this article, we’ll explore this often misunderstood aspect of property development and show you how to increase your property values by 25-35%.

So, what is title splitting?

In summary, title splitting involves dividing a single property title into multiple legal entities. You can do this by dividing a freehold into several new freeholds or creating leaseholds from a freehold property. 

The practice of title splitting dates back to the 17th century, but it’s quickly becoming a relevant way for modern developers to optimise their portfolios. 

Common applications of title splitting include:

• Converting a large house into multiple flats
• Separating commercial and residential elements in mixed-use buildings
• Dividing land for development purposes
• Creating separate titles for HMO (House in Multiple Occupation) properties
• Splitting retail units to create smaller, higher-value spaces

What about the 2024 Leasehold Reform Act?

In 2024, we got the Leasehold Reform Act which introduced two major changes that developers need to consider:

1. Ground rent on new leases is now restricted to a "peppercorn" rate (effectively zero)
2. New leases must be granted for a minimum of 990 years

These changes make leasehold properties more mortgageable and attractive to buyers, potentially increasing their value. The Act also makes it easier for leaseholders to club and purchase their freehold.

Do you need planning permission to split the title?

The short answer is: it depends. 

While the actual process of title splitting is a legal rather than a planning matter, any physical alterations to the property require planning permission. Here's what you need to consider:

• Converting a property into separate units typically requires planning permission
• Change of use applications may be necessary for mixed-use developments
• Building regulations approval is essential for any structural changes
• Listed buildings or properties in conservation areas may have additional requirements
• Fire safety regulations must be met for multiple occupancy

How the title splitting process works

A typical title split involves five stages:

1. Initial property assessment and feasibility study
2. Planning permission (if required for physical changes)
3. Legal documentation preparation
4. Land Registry application
5. Creation of new titles

The process typically takes 3-6 months but varies depending on complexity and local authority involvement. Working with experienced professionals like our partners at Title Split can help streamline your timeline.

How to find title split opportunities

Identifying suitable properties for title splitting requires careful analysis. Ideal candidate properties often include:

• Large-period properties suitable for conversion
• Mixed-use buildings with separate commercial and residential elements
• Properties with development potential on the grounds
• Buildings with natural division points
• Former commercial properties ideal for residential conversion
• Properties in areas with strong rental demand
• Buildings with underutilised space or potential for vertical extension

Strategic considerations before buying

When evaluating a potential title split project, consider:

Location factors

• Local market demand for smaller units
• Proximity to transport links
• Local planning policies and restrictions
• Area regeneration plans
• Competition from similar developments

Financial aspects

• Conversion costs versus potential return
• Financing options for split properties
• Tax implications and structuring
• Long-term management costs
• Potential rental yields post-split

Leverage technology to find the best title-splitting opportunities

Finding title split opportunities has traditionally been a manual, time-consuming process. Hours and hours combing through tabs and documents was the norm. This is no longer necessary because Searchland helps you quickly identify potential title split opportunities by:

• Identifying properties with title split potential
• Assessing planning constraints and opportunities
• Analysing local market conditions
• Tracking similar successful developments
• Monitoring ownership and transaction history
• Evaluating Demographic Trends Affecting Demand
• Accessing comprehensive planning histories

Maximising property value through title splitting

When executed correctly, title splitting can add significant value to your property portfolio. Industry experts estimate that you can achieve capital growth of 25-35% through strategic title splitting.

Next steps?

Ready to explore title-splitting opportunities? Start by:

1. Understanding your local market and demand
2. Identifying suitable properties using the Searchland platform
3. Consulting with legal experts specialising in title splits
4. Building a powerful team of professionals to support your project
5. Creating a detailed feasibility study and business plan

For comprehensive training on title splitting strategies, our partners at Title Split offer specialised courses for developers and investors looking to master this approach.

Book a demo

Want to see how Searchland can help you identify title-splitting opportunities? Book a demo today and discover how our powerful site-sourcing platform can boost your development pipeline.

Want to learn more about property development strategies? Our guide on building a profitable HMO portfolio provides insights into maximising investment returns.

‍