Originally Posted by Lawcruncher
If the lender has to repossess/sell, then it is far easier to sell two leasehold flats to either owner occupiers or individual BTL, as opposed to a house divided into flats. Accordingly the value will be higher.
I agree that it is perfectly possible to fund it without granting leases, and using a company as below might avoid the need to separate ownerships as lawcruncher has posted, but you might get better terms.
I suggest you discuss with it a solicitor who deal with property matters not just a conveyancer and get advice from a financial consultant not "dave" really Sanjeet, from the call centre.
I'd be careful though about the freehold and creation of leases and take tax advice to minimise your liability.
As freeholds can be valuable too, and bluntly A + B may fall out/fail to agree, I suggest the freehold be put into a simple company,with 2 shares, so that you can sell the freehold ( by selling the company) later without having to offer it to leaseholders.
But either way do make sure that you put into your declaration of trust partnership agreement or articles some form of mediation or arbitration in the event you disagree over something.
Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers