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  • FIRST POST
    • enibaba-uk
    • By enibaba-uk 11th Mar 18, 4:37 PM
    • 4Posts
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    enibaba-uk
    Short Lease Mortgage Lenders
    • #1
    • 11th Mar 18, 4:37 PM
    Short Lease Mortgage Lenders 11th Mar 18 at 4:37 PM
    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
Page 1
    • eddddy
    • By eddddy 11th Mar 18, 4:47 PM
    • 6,483 Posts
    • 6,368 Thanks
    eddddy
    • #2
    • 11th Mar 18, 4:47 PM
    • #2
    • 11th Mar 18, 4:47 PM
    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.
    • enibaba-uk
    • By enibaba-uk 11th Mar 18, 5:08 PM
    • 4 Posts
    • 0 Thanks
    enibaba-uk
    • #3
    • 11th Mar 18, 5:08 PM
    • #3
    • 11th Mar 18, 5:08 PM
    Eddddy!

    Thank you very much. That's very helpful!
    • Tom99
    • By Tom99 12th Mar 18, 2:35 AM
    • 2,240 Posts
    • 1,520 Thanks
    Tom99
    • #4
    • 12th Mar 18, 2:35 AM
    • #4
    • 12th Mar 18, 2:35 AM
    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.

    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.
    • AdrianC
    • By AdrianC 12th Mar 18, 8:31 AM
    • 17,602 Posts
    • 15,965 Thanks
    AdrianC
    • #5
    • 12th Mar 18, 8:31 AM
    • #5
    • 12th Mar 18, 8:31 AM
    We are first time buyers and looking at a flat with a 54year lease for 175.000.
    Originally posted by enibaba-uk
    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.

    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/
    • Tom99
    • By Tom99 12th Mar 18, 8:37 AM
    • 2,240 Posts
    • 1,520 Thanks
    Tom99
    • #6
    • 12th Mar 18, 8:37 AM
    • #6
    • 12th Mar 18, 8:37 AM
    you cannot go the statutory route for the first two years of your ownership
    Originally posted by AdrianC
    You can if the vendor qualifies and serves notice before they sell to you.
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