Yes, you can sometimes get a mortgage on a flat with a short lease. The number in the estate agent’s particulars is only the starting point. A lender may also want to know how many years will be left when you finish repaying, how much of the price you need to borrow and whether the flat would be easy to sell. That is why two buyers looking at the same flat can get different answers.
If you have found a flat you like, get three figures before you spend money on an application. Find out how long the lease has left, decide what price you intend to offer and work out the deposit you can put towards the purchase. Here is how those figures fit together for someone buying an existing flat to live in, in England or Wales.
How many years do mortgage lenders need on the lease?
Each lender sets its own criteria. Ask your broker to check the lease length at two points: when you take out the mortgage and when the final payment is due. Give them your proposed mortgage term, deposit and repayment method. The criteria can differ if you need to borrow a larger share of the flat’s value or if any of the loan is interest-only.
What would that mean for a £250,000 flat with a 65-year lease?
Suppose you want a 25-year repayment mortgage and the lender values the flat at the agreed price of £250,000. Either way, the lease would have 40 years left when the mortgage ends. What changes with the deposit is how much of the flat’s value you need to borrow.
| Deposit | Mortgage needed | Loan-to-value |
|---|---|---|
| £50,000 | £200,000 | 80% |
| £25,000 | £225,000 | 90% |
If you have £50,000 in savings but need to keep £25,000 back for a lease extension, ask your broker to check the second row. A lender may apply different lease criteria at 90% loan-to-value. The valuation, ground rent and your ability to afford the repayments also affect the decision.
What about a 60-year lease? A 30-year mortgage would leave 30 years on the lease. A 35-year mortgage would leave 25. A shorter repayment term leaves more years on the lease at the final payment, but usually means a higher monthly payment on the same loan at the same rate. The lender will still check the lease length at the start.
Is a flat with a short lease good value?
Compare the asking price with a similar flat on a long lease. Then work out how much of the difference an extension could use up. On the formal route, budget for the price of the extension (the premium), your solicitor and valuer, and the landlord’s reasonable legal and valuation costs. Check service charges and planned major works separately. A specialist valuer can estimate the premium for this particular flat. See the Leasehold Advisory Service guide to extension costs.
Why do buyers hear so much about 80 years? For a qualifying flat, 80 years matters when calculating the price of a statutory lease extension. If 80 years or fewer remain when the formal notice is served, the premium can include marriage value. This reflects the increase in the combined value of the leaseholder’s and landlord’s interests that the extension creates. If the listing says “about 80 years”, ask your conveyancer for the exact expiry date and your valuer what the timing means for the price. Mortgage eligibility is a separate check. Read how marriage value works.
What if the seller says the lease can be extended?
Ask what the seller has in writing. Has the freeholder simply agreed to discuss an extension? Have they offered terms? Or has the seller served a formal notice and proposed transferring the claim to you on completion? Ask your conveyancer to establish which route is available, who pays and when the extension can complete. The Leasehold Advisory Service has guidance for buyers taking over a seller’s claim.
If the purchase depends on a longer lease, have your broker confirm what the lender needs before it will release the mortgage funds. Ask your conveyancer to check that the sale and extension can happen in that order before you exchange contracts. If you plan to extend after buying, keep enough cash for the premium and fees as well as the deposit.
What if you already own the flat?
Start with your lease expiry date and your mortgage deal end date. A flat bought five years ago with 73 years left now has about 68. If you want to remortgage and pay for an extension, get a current estimate of the premium and fees. Ask your broker which options a lender can assess on the existing lease and which depend on the extension completing. Explore remortgage advice from Greenacre.
Before you make an offer
- Ask the agent for the lease expiry date, the ground rent and how it changes, the service charge and any planned major works. Request written details of extension discussions.
- Ask your conveyancer to verify the lease against the title and flag terms that may affect the purchase. Ask a specialist valuer to estimate the extension price.
- Ask your broker to check the flat against your deposit, mortgage term and repayment method. Tell them how much of your savings you need to keep for an extension.
If you have a particular flat in mind, send Greenacre the property listing, quoted lease length, proposed price and available deposit. We can use those figures to check lender criteria and explain what still needs confirming before you spend money on the purchase. Discuss a short-lease flat with Greenacre.
Your home may be repossessed if you do not keep up repayments on your mortgage.