Can you get a mortgage with a short lease?

Whether you can get a mortgage with a short lease really depends on the lender. Many lenders will not give you a mortgage if you only have 70 years or less left on the lease.

If you buy a house or flat in England and Wales, it’ll either be leasehold or freehold. If it’s freehold, you own the property and the land that it stands on. With a leasehold property, you will not own the land it’s built on and you will only own the property for a specified length of time. 

If you are lucky, it could be as long as 900 years or more. Unfortunately, for most properties, the leases are usually granted between 90 and 120 years. This is why it is always important to verify the actual length of the lease through the Land Registry or through your solicitor before buying a leasehold property. 

When reviewing the lease with the Land Registry, they will give you the actual date in which the lease was granted and the length of time left to run, so you can be absolutely sure of the accurate length of the lease. 

Whether you can get a mortgage or not, will depend on the length of the lease. The length of the lease will also impact the value of the property, especially if it has less than 70 years which can make it more difficult to sell.

As a rule of thumb, mortgage lenders will normally not lend money on a property that has less than 30 to 40 years left to run after the mortgage expires. In practice, this means if you apply for a 35-year mortgage, you’ll need to have a lease with a minimum of 75 years left on it. Put another way, this means that most lenders will not lend on properties with a “short” lease of fewer than 70 years left to run. It’s also worth noting that a property with a lease of less than 80 years is normally considered to be a “short lease” too. So, if you bought a property with between 80-85 years left to run, you might wish to consider the following: 

Unfortunately for leasehold property buyers, it may be that a comparable property that is freehold is less expensive and more straightforward to buy without having to consider or go down the road of extending the lease. 

Also, mortgage rates on leasehold properties tend to be higher depending on the length of the lease. It is also worth remembering that conveyancing costs on buying a leasehold property are also usually higher because there is more legal documentation involved with this process. All these considerations can be complicated and expensive, so it’s crucial to get clear and sound legal advice.

At GloverPriest, we provide friendly and transparent legal advice. If you would like further advice on your property, please don’t hesitate to speak to one of our expert lawyers today. Complete our enquiry form.