How to get equity release on a leasehold property | moneyfacts.co.uk

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Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 17/02/2021

At a glance

  • Leasehold flats and houses can be eligible for equity release
  • You will need at least 75 years on your lease to find an equity release lender
  • You can use equity release to fund extending your leasehold

Can I get equity release on a leasehold property?

Yes, it is possible to get equity release on a leasehold property. The lender will need to consider how long you have left on the lease, the cost of any ground rent and service charges and any sell-on clauses.

How many years do I need to have on my lease to get equity release?

Different equity release lenders will have different minimum terms of leases that they will accept. This can range from a minimum of 75 years, with some lenders wanting at least 90 or 125 years remaining on the lease. There are new rights coming into force that will allow leases to be extended up to 990 years without having to pay ground rent. There are still other costs to be considered when extending your lease, such as valuation and legal fees.

Which lenders will consider a lease of less than 100 years?

More2Life will only allow a 100-year lease on their flexi choice products for those aged over 81 years. Those aged between 55 to 60 will need at least 125 years. This minimum lease reduces as the borrower gets older. Those choosing a capital product from More2Life will need at least 175 years on the lease minus the age of the youngest borrower. For example, if the borrower was aged 60, they would need a lease of at least 115 years.
Most Just For You lifetime mortgages require a minimum lease of 120 years. Leases between 100 to 119 years may be subject to a reduction in the available loan to value.

Can I use equity release to pay to extend my lease?

Yes, you can choose to use some of the money from equity release to pay for a lease extension. Your equity release application and lease extension will need to happen at the same time. The equity release lender will need to review and approve the lease extension. The equity release application can only complete once the lease extension is confirmed. A lease extension can take around six months.

Find out how much money you could release from your home

Go to the equity release calculator provided by HUB Financial Solutions and see how much money you could release from your home.

Can I get equity release if my flat has cladding?

Since the Grenfell disaster it has become very difficult to get a mortgage on a property with cladding or combustible materials. Equity release is also a form of lending secured against the property and therefore anything that risks the potential value or saleability of the property will deter lenders from using this as collateral. There is new Government support now being made available to those affected by combustible cladding and this may help to get equity release in the future. A whole of market equity release adviser will know the lenders most likely to accept an application in these circumstances.

How to get ready to apply for equity release on a flat?

You should make sure you can share the following with your equity release adviser:

  • The cost of your service charges
  • A copy of the buildings insurance
  • The cost of any ground rent
  • If there are any sell-on fees or clauses on your property

Can I get equity release on a leasehold house?

Yes, it is possible to release equity from leasehold houses. The equity release lender will want to know your ground rent charges and see a copy of your lease agreement.

Equity release and flats FAQ

Can I get equity release on an ex-council flat?

There are selected lenders that will give equity release against a former local authority property or an ex-council flat. A specialist equity release broker will know the right lenders to talk to.

Can I get equity release on a retirement flat?

Yes, there are equity release lenders that will give equity release against a retirement flat, however the number will be limited so an equity release broker can help to save you time finding an equity release lender that will consider these.

What criteria might be in place to get equity release on a flat?

Blocks of flats of more than four storeys may need to have a lift to meet the equity release lender’s criteria.

How does equity release work?

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

Flats apartments

At a glance

  • Leasehold flats and houses can be eligible for equity release
  • You will need at least 75 years on your lease to find an equity release lender
  • You can use equity release to fund extending your leasehold

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