I don’t have enough years on my lease to be eligible for equity release
If you don’t have enough years remaining on your lease, you may be able to extend its length so that your flat becomes eligible for equity release.
The good news is that if you own your flat, you have a legal right to extend your lease providing you meet certain conditions:
- You have owned your lease for the last two years.
- The lease must have an original term of more than 21 years when it was first granted.
- Your landlord is not a charity providing a flat for you as part of their work.
- It is not a business or commercial lease.
The Leasehold Advisory Service has put together information on how to apply to extend your lease on their page “How can I extend my lease?”. In short, you can do this in two main ways: the informal route and the formal route.
Informally, you can ask the freeholder whether they are interested in negotiating a lease extension, but they are under no obligation to respond or agree to your request.
If you cannot reach an agreement, or they do not respond, then you can do things formally. This where you serve a formal notice on your landlord outlining your claim and your terms. They must reply to you and adhere to timescales set by law. However, this option can be complex, so seeking legal advice is recommended.
Another option might be to buy the freehold or a share of the freehold with owners of other flats in the building.
These solutions will incur some costs and legal fees, although the good news is that you may be able to cover these from some of the money you release.
You can get help and advice on these solutions from our selected equity release advisers. They can also connect you with solicitors with equity release expertise and experience to help. Please call us on 0808 178 3055, or request a call back and we will be happy to arrange an appointment for you.
The nature of the lease
Lenders will typically want to see the lease to check that it meets certain additional criteria. They will check that the lease is ‘marketable’ with no onerous clauses that could negatively affect their ability to sell the property at the end of the equity release plan. Examples could include excessive service charges or ground rents.
The type of flat
Not all leasehold flats are the same. Some will be in a purpose-built block, some in a converted house, some above a shop or other commercial premises, and so on.
Lenders each have their own criteria for the type of flats they will and will not accept. For example, some providers will not accept ex-local authority flats, basement flats or flats above commercial premises. Some lenders may also refuse flats in blocks above a specified number of storeys.
Please note: Information about providers’ lending criteria is correct at time of publication. Providers will have additional relevant lending criteria for equity release on leasehold flats, for example they will typically request a survey to check that the flat is in good and saleable condition. Please contact us to talk to one of our selected advisers about your particular circumstances and eligibility for equity release on leasehold flats.