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Trusted advisors for leasehold mortgages.

We make buying leasehold mortgages easy. Talk to one of our expert advisors today and we’ll help your property-owning dreams take shape.

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Finding The Best Leasehold Properties Mortgage Deal For Your Circumstances

If you struggle to get a leasehold mortgage, you will no doubt be frustrated. Unfortunately, short leases of below 60 years can cause problems. However, When the Bank Says No has a habit of overcoming problems! With our intricate understanding of the market, we can help you get a leasehold mortgage against the odds. Our team of friendly advisors are here to support you at every stage of your journey, helping you find and negotiate the right deal for you.

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Releasing you from leasehold mortgage stress.

Leaseholds can make property ownership seem even more complicated, but finding a mortgage doesn’t have to be stressful. Our personable team will guide you through the process, taking the hassle out of finding finance, so you can focus on the fun side of moving home! Our team of friendly advisors are on a mission to stop any obstacles getting in the way of our clients’ dreams. When all the odds seem against you, we’re here to take away the fear.

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What is a leasehold property?

To explain this simply, properties come with one of two statuses – a freehold property or a leasehold property. A freehold property is a property built on land that is also owned by the property owner. Whereas with a leasehold property, you only own the property itself, not the land it’s built on. Therefore, to buy a leasehold property is to buy rights to its use over a long period of time, a minimum of 21 years. Leasehold properties are bought from a landlord for the right to use during those years, so long as they pay ground rent annually. When you sign the agreement, you take on the leasehold ownership. That being said, buying a leasehold property means that you will be responsible for the maintenance fees and service charges.

What is a leasehold mortgage?

The owner of a freehold property owns both the property and the land. The owner of a leasehold property is the owner of just the property. Freehold and leasehold mortgages respect these arrangements, as a leasehold mortgage only applies to the property.

This means that a mortgaged leasehold property has a freeholder who owns the grounds and a leaseholder who owns the property for a specified number of years (a new lease is usually 999 years). This term can be extended if both parties agree by purchasing a longer lease. Since leasehold properties come with added risks and are considered less valuable than freehold properties, a leasehold mortgage can be trickier to access and achieve approval.

Turning Your Nightmares Into Dreams

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When you think you’ve hit that brick wall and have all but given up hope of finding mortgage finance, When the Bank Says No are here to turn your ‘No’ into a ‘Yes’. We have access to a range of specialist lenders who are willing to help those that the High Street banks just won’t touch. Get in touch today and see how we can turn your dreams into a reality.

Can I get a mortgage on a leasehold property?

Getting a mortgage on a leasehold property is entirely possible. These types of mortgages are known as leasehold mortgages.

The biggest factor in whether or not you may get an extension depends on the remaining duration of a lease. If a lease expires in less than seventy years, your chances are lowered in getting that leasehold mortgage. A leasehold property with a short lease is called a short leasehold property.

Whilst seventy years seems like a long lease, this is actually not true as far as the bank, and many mortgage lenders, are concerned. After all, they see your proposed leasehold mortgage as a risk in this case, as the mortgage lenders rely on being able to sell the property should you be unable to pay the mortgage.

A lease extension may be a good idea here, but talking about the options open to you with the experts is your best bet here. 

Can I get a mortgage if my property is leasehold and I have bad credit?

Whilst this wouldn’t be the most appealing combination of circumstances for your mortgage process, nothing is impossible. In fact, When the Bank Says No has access to many specialist lenders who dedicate themselves to providing loans to those with a bad credit history and for leasehold properties. It’s all about keeping positive and doing the right amount of research and preparation – something we can help you with.

Mortgage costs and the fine details of the agreement may differ if you have bad credit. Get in touch with one of our friendly advisors today and we can kickstart your journey to mortgage success!

Frequently Asked Questions

Is it difficult to sell a property that is leasehold?

The reason why the idea that leasehold properties are hard to sell is so prevalent is due to the length of the lease. A short lease jeopardises the bank or mortgage lenders’ ability to properly trust in your ability to pay back the mortgage. In the eyes of real estate, this diminishes property value.

If you own a leasehold property, you should try to get a lease extension. A reason why this is so important is that anyone who takes on the leaseholder title will have to wait two years to negotiate a new lease.

If you own a leasehold property, you have the right to extend the lease according to the leasehold reform act. The leasehold reform act allows a leaseholder to add 50 or 90 years to the lease of a house, reducing the ground rent by a massive amount.

Preventing lease expires through this method increases the property values of leasehold properties. The value increased through this method is referred to as the marriage value.

The reason why the idea that leasehold properties are hard to sell is so prevalent is due to the length of the lease. A short lease jeopardises the bank or mortgage lenders’ ability to properly trust in your ability to pay back the mortgage. In the eyes of real estate, this diminishes property value.

If you own a leasehold property, you should try to get a lease extension. A reason why this is so important is that anyone who takes on the leaseholder title will have to wait two years to negotiate a new lease.

If you own a leasehold property, you have the right to extend the lease according to the leasehold reform act. The leasehold reform act allows a leaseholder to add 50 or 90 years to the lease of a house, reducing the ground rent by a massive amount.

Preventing lease expires through this method increases the property values of leasehold properties. The value increased through this method is referred to as the marriage value.

The marriage value of a leasehold property is the value added to the property when you extend the lease. When you extend the lease, you are required by law to pay 50% of the value it has increased to the freeholder.

The one way to avoid paying the marriage value, however, is having it rendered zero. You can do this by keeping the lease term higher than 80 years.

This is called enfranchisement, and it’s perfectly possible! You will need to pay for a RICS freehold valuation and then purchase the freehold at this price. It’s important to note that once you own the freehold you will be solely responsible for upkeep and maintenance, so make sure you are able to cover these monthly outgoings alongside your mortgage repayments.

As long as there is at least 30 years left at the end of the mortgage term, you are likely to have some options. There are certain situations where the lease will be extended as part of the purchase, so this can help you expand the deals you have access to. It’s always best to get expert advice when buying a leasehold property to make sure you fully understand the implications of this type of ownership. Short or complex leases can cause problems, but not for all lenders. Whatever the particular situation with your chosen property, our expert advisors can help you navigate it.

Expert advice for leasehold property mortgages.

When the Bank Says No has helped prospective property owners all over the UK achieve a suitable mortgage on their leasehold property. Whether the lease has hundreds of years remaining or less than 40, we’ll work within your circumstances to identify the best way forwards. With useful insights into the mortgage market, handy tools and plenty of helpful advice, we’ll help you move forwards with your property journey well informed and ready to succeed.

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