The length of the lease on an ex-council flat significantly impacts mortgage approval. Lenders typically require a minimum remaining lease term of 70 to 80 years at the time of application. Shorter leases are seen as higher risk because they can be harder to sell and may require costly lease extensions. If the lease term is below this threshold, lenders might:
Require a higher deposit.
Offer a lower loan-to-value (LTV) ratio.
Charge higher interest rates.
In some cases, refuse the mortgage application.
Extending the lease can be expensive and involve legal and administrative processes, which should be factored into the overall cost of purchasing the property. Buyers should ensure they understand the lease terms and consult with a solicitor experienced in leasehold properties to navigate these complexities effectively.