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Short Lease Mortgage Lenders
enibaba-uk
Posts: 4 Newbie
Hi.
I was wondering if anybody came across a bank that gives mortgages on a short lease.
We are first time buyers and looking at a flat with a 54year lease for £175.000. We could come up with the 75 but need the rest of the money.
I have looked and as far as I can see no regular banks would lend on a short lease like this.
If anybody bought like this or have any advice regards to it I would be grateful for the advice.
Thank you
I was wondering if anybody came across a bank that gives mortgages on a short lease.
We are first time buyers and looking at a flat with a 54year lease for £175.000. We could come up with the 75 but need the rest of the money.
I have looked and as far as I can see no regular banks would lend on a short lease like this.
If anybody bought like this or have any advice regards to it I would be grateful for the advice.
Thank you
0
Comments
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The council of mortgage lenders asked lenders what minimum unexpired lease term they would accept.
Here's a table of their answers:
https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/1846/
Some do suggest that they will consider leases which will have 25 or 30 years remaining at the end of the mortgage term.0 -
Eddddy!
Thank you very much. That's very helpful!0 -
[FONT=Verdana, sans-serif]Make sure you are paying an appropriately discounted price for the 54 year lease as it will cost you a lot to extend the lease and you would probably be wise to do that.
[/FONT] [FONT=Verdana, sans-serif]If the vendor has owned the flat for 2 years they could agree to serve a lease extension notice now and assign it to you so that you don't have to wait 2 more year when the flat will then only have 52 years and the extension even more expensive.[/FONT]0 -
What would the long-lease value of the flat be? The discount price that's attracted you is not ONLY because of the unmortgageability of it.enibaba-uk wrote: »We are first time buyers and looking at a flat with a 54year lease for £175.000.
As a guide, if we assume it's £250k and currently a peppercorn ground rent, then a statutory lease extension will cost you around £40k plus costs. You may be able to renew the lease more cheaply through negotiation, but look very carefully at the ground rent as part of that. The longer you leave it, the more it will cost - and you cannot go the statutory route for the first two years of your ownership. In two years time, it will likely have gone up £3k or so.
https://www.lease-advice.org/calculator/0
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