Last reviewed: June 2026
TL;DR- A lease below 80 years is considered short by most mortgage lenders and restricts lender choice significantly.
- Below 70 years remaining, the property is effectively unmortgageable through mainstream lenders.
- A simultaneous lease extension - agreed with the freeholder and completed at or shortly after the property purchase - is the most common solution.
- Below 80 years, "marriage value" is added to the lease extension premium, increasing the cost significantly.
What Is a Short Lease?
A short lease is one where the remaining term is approaching levels that affect value and mortgageability. There is no single legal definition of "short" but in mortgage lending practice, leases below 80 years are considered short by most lenders and below 70 years are typically unmortgageable through mainstream channels. The concern is that the property's value will erode as the lease shortens, and that the restricted buyer market for short lease properties reduces the lender's ability to recover its debt in a repossession.
The Marriage Value Issue
When a lease falls below 80 years, the cost of extending it increases significantly due to a concept called "marriage value." Marriage value is the additional value created by extending the lease - the uplift in the property's value that results from the extended lease. Under the Leasehold Reform, Housing and Urban Development Act 1993, where a lease has less than 80 years remaining at the time of the statutory extension claim, the leaseholder must pay 50% of the marriage value to the freeholder in addition to the standard extension premium. This can add substantially to the cost of extension. For leases above 80 years, no marriage value is payable.
This creates a strong incentive for leaseholders to extend their lease before it falls below 80 years. The Leasehold and Freehold Reform Act 2024 may change the marriage value rules - the current position should be checked with a specialist leasehold solicitor.
Simultaneous Lease Extension
A simultaneous lease extension is where the buyer negotiates a lease extension with the freeholder and completes both the property purchase and the lease extension at the same time. This allows a buyer to purchase a property with a short lease at a reduced price (reflecting the short lease) while immediately extending the lease to a mortgageable length. The mortgage lender lends against the extended lease rather than the current short lease. Not all lenders accept simultaneous extension arrangements and those that do require the extension to be unconditionally agreed before they will proceed with the mortgage.
Specialist Lenders for Short Leases
A small number of specialist lenders will consider mortgage applications on properties with leases below mainstream thresholds, subject to the simultaneous extension being in process or to larger deposits. These lenders are not mainstream banks and typically charge higher rates to reflect the additional risk. A specialist mortgage broker with short lease experience is essential in this area.
Frequently Asked Questions
How much does a lease extension typically cost?
The cost of a statutory lease extension depends on the property's value, the ground rent, the remaining lease term and market capitalisation rates. For a flat worth £300,000 with 75 years remaining and a low ground rent, the premium might be in the range of £15,000-£30,000, though this varies significantly. RICS-qualified leasehold valuers provide initial estimates. The Leasehold Advisory Service (LEASE) provides free guidance and an online calculator to estimate extension premiums.
Can I extend the lease immediately after purchase?
Yes. Qualifying leaseholders who have owned their flat for at least two years have the statutory right to extend their lease. Buyers who wish to extend must therefore wait two years from the date of purchase before exercising the statutory right - unless they negotiate an informal extension with the freeholder before or at the point of purchase (simultaneous extension). Many buyers who purchase a property with a lease above 80 years plan to extend at some point - they should monitor the lease length and extend before it falls below 80 years.
Does the freeholder have to agree to a lease extension?
Under the statutory route (Leasehold Reform, Housing and Urban Development Act 1993), qualifying leaseholders have the legal right to extend their lease for 90 years at a peppercorn ground rent. The freeholder cannot refuse the extension - they can only negotiate the premium. Outside the statutory route (informal negotiation), the freeholder can refuse or negotiate different terms. The statutory route provides the leaseholder with certainty but involves legal and valuation costs for both parties.
How long does a lease extension take?
An informal (negotiated) lease extension can be completed quickly - weeks or months if both parties agree terms. A statutory extension under the 1993 Act involves a formal notice process and typically takes 6-12 months from the initial notice to the new lease being completed, though it can take longer if the premium is disputed and goes to the First-tier Tribunal (Property Chamber) for determination.
