Can you get equity release on a leasehold property?
Lenders will want to know certain things, like how long you’ve got left on your lease. What you tell them will help decide if they can offer you equity release or not
Yes, it’s possible to get equity release on a leasehold property
But providers will want to know certain things, like how long you’ve got left on your lease. The information you provide about your situation will help them decide if they can offer you equity release or not.
Equity release explained
If you’re aged 55 or over, equity release is a way of unlocking some of the money (or equity) tied up in your home. All without having to move.
There are two types of equity release – a home reversion plan and a lifetime mortgage.
A home reversion plan lets a homeowner to sell part, or all, of their home in return for a cash lump sum payment. Customers can live in their homes for as long as they want. However, when they sell their home, the provider gets the same percentage of the sale proceeds as originally sold to them by the homeowner.
The type of equity release we offer is known as a lifetime mortgage. It’s a long-term loan secured on your home that’s usually repaid by selling your property after you die, or if you need to go into long-term care, depending on the provider's terms and conditions. Until then, you continue to own your own home and won’t have to move out.
Equity release is a big financial commitment and understanding what it would mean for you is important. It will shrink the amount of inheritance you’re able to leave. It may also affect your tax position and eligibility for certain means-tested benefits. Plus, interest can quickly increase the amount you owe. Providers usually add interest annually onto both your loan and any interest already added.
Before you decide whether a lifetime mortgage/equity release is right for you, it's important to think about the costs, benefits, and risks that come with it.
You'll need to get financial advice before you go ahead with equity release..
Can you get equity release on a leasehold flat or house?
Leasehold properties can be both flats and houses. Providers will have different guidelines about the type of leasehold properties they’re happy to lend on.
With leasehold houses, they’ll want to know your ground rent charges and see a copy of your lease agreement. Meanwhile, some providers might give a firm no to lending on certain types of leasehold flats.
With us, you can get equity release on most kinds of leasehold houses, flats or maisonettes. But we have certain requirements that need ticking off. So you should always get in touch to ask about your individual circumstances.
Getting equity release on a retirement flat
Yes, it may be possible to get equity release on a retirement flat. However, the pool of providers who offer this is small. We don’t offer equity release on retirement flats or any other age restricted properties.
How many years do you need left on your lease to get equity release?
When a leasehold property is built, the lease is set for a certain amount of time. The length of yours will be on your title deeds and in your lease documents.
Providers will want to know how much time is left on your lease when weighing up if they can offer you equity release. They’ll have a minimum requirement for the number of years left. And this will change from provider to provider.
With us, the number of years you have left on your lease plus the age of the youngest borrower must equal at least 160. For example, if the youngest borrower is 70 years old, there must be at least 90 years remaining on the lease. Because 70 + 90 = 160. The minimum lease length we will consider is 75 years.
What happens if your lease is too short for equity release
If you don’t have enough time left on your lease, there are a couple of things you can do. For example, you may be able to extend the length of the lease. But be warned, this will rack up some costs, including legal and valuation fees. If this is a route you want to take, speak to your freeholder or managing agent to find out exactly what’s involved.
Can you use equity release to extend your lease?
Yes, you can use some of the money you unlock from your home to pay for a lease extension. Different providers will have different requirements for how you approach this.
For example, with us, you’ll need to get written evidence that you and your freeholder have agreed on the leasehold extension. The extension must then be completed at the same time as the equity release loan is made (or earlier).
Information you’ll need to provide about your leasehold property
If you’re looking to get equity release on a leasehold property, your provider will ask to see certain information. This could include the:
- Service charge
- Ground rent
- Buildings insurance
- Sell-on fees
- Number of years remaining on the lease
- Age of youngest borrower
And if you live in a leasehold flat, they may also want to know things like how many storeys the block has and what floor you live on, if it’s covered by block insurance and if there’s a management company.
How we can help
The type of equity release we offer is called a lifetime mortgage. Every year this helps thousands of people tap into the value of their home without having to move or make monthly repayments.
Find out more about our equity release lifetime mortgage.
Get specialist equity release advice
Take your first step by arranging a call with a UK-based equity release adviser. You don’t have to commit to anything, it’s just to see if it’s an option for you. And you won’t pay a separate advice fee. Instead, we'll make a commission payment to the adviser on completion of your loan. Here are two ways to get in touch.
Call us free
Ring now and make an appointment with an equity release adviser.
0800 141 3493
- Monday to Friday: 9:00am - 6:00pm
- Weekends and Bank Holidays: Closed
Ask us to call you
Give us your name and number, and an adviser will call you. You can pick a chosen day and whether morning or afternoon is best.Request a call back
Your call will be answered by the Aviva Equity Release Advice team, who can provide information and advice on Aviva’s lifetime mortgages only. They're authorised and regulated by the Financial Conduct Authority.
Calls to 0800 or 0808 numbers from UK landlines and mobiles are free. For our joint protection, calls may be recorded or monitored, and saved for a minimum of 5 years. Our opening hours may be different depending on which team you need to speak to.