Getting a Loan for a Lease Extension - By: Tim Bishop

If you decide to sell your leasehold apartment, you need to check how many years are left on it. If the amount has fallen below 70 years then you need to think about getting an extension.

You're still feeling confused? Well, it's probably fair to say that most of us mortals need the help of a high street lender when buying a property or home. So you still don't get it and ask, 'What's the problem?'

The underlying issue that you need to address is that very few lenders are prepared to offer a loan for a flat where the lease has fallen below 70 years.

To make things more complex, banks and building societies have different and varying policies on how long your lease needs to be before they will agree to make you a loan. It is worth approaching different mortgagors and asking 'What is the minimum unexpired leasehold term do you lend to?' and you'll get a variety of answers. Below are 8 different examples we found:

1. Nationwide Building Society

The minimum unexpired lease term is 55 years subject to at least 30 years remaining at the end of the mortgage term.

2. Coventry Building Society

When extending a lease, a minimum of 70 years unexpired lease is required.

3. Bristol & West

A 70 year lease is minimum unexpired term for leasehold extension.

4. Abbey National plc

In most cases the minimum unexpired lease term is 55 years unexpired from completion subject to at least 30 years remaining at the end of the mortgage term. However if it turns out that the unexpired term from completion is actually between 55-70 years and firstly, this was not stated in the valuation or secondly, you were not given a valuation, you should seek advice before you proceed any further.

5. Halifax

Mortgage Term plus 30 years is the criteria here for leasehold extension.

6. Bradford & Bingley plc

A minimum of 50 years is required here at the commencement of the mortgage and at least 35 years at the end for loaning on leasehold extension or purchase.

So you can see that it makes sense to shop around! It is sensible to take active steps towards getting your leasehold extended! This is a difficult and complex area of the law, therefore it is always advisable to retain a specialist leasehold extension solicitor. Make their job easier first, though, by doing some fact finding and get armed with figures.

About the Author

Tim Bishop is senior partner at Bonallack & Bishop, a firm of Lease Extension Solicitors specialising in advice on extending a lease. He is responsible for all major strategic decisions, seeing himself as a businessman who owns a law firm. Tim has expanded the firm by 1000% in 12 years and has plans for its continued development.

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