Problems found after you bought · Short lease
When I bought this property, I didn’t know A short lease could hold up a sale or a remortgage. Now I’m stuck.
Would you have bought the property if you had known?
If you had known how short the lease would be before you committed, and understood the problems it could cause when you later came to sell or remortgage, would it have changed your decision?
- Would you have paid the same price?
- Would you have wanted it investigated first?
- Would you have walked away?
If knowing about the problem might have changed what you did, the next question is obvious.
Did you receive the right advice when you bought?
You may not know the answer yet. But if nobody explained the problem, or you are now questioning what you were told at the time, that is worth looking at.
You don’t need to know whether anyone was at fault. Tell us what happened and when you bought. We’ll talk it through with you.
Why a short lease can hold up a sale or remortgage
A lease is ownership for a fixed period. Every year it gets shorter, and at some point the length left starts to matter to other people: to a valuer pricing the property, and to a lender deciding whether to lend on it. It can be hard to accept, because nothing about the property has changed. The term was always going to run down. It has simply reached the point where it affects what someone else will do.
A sale or remortgage can be held up even though nothing at the property has gone wrong. A lender’s requirements may specify a minimum unexpired term, usually related to the length of the mortgage being offered. On a sale, the buyer’s solicitor will need to consider the remaining lease term when advising the buyer and complying with any applicable lender requirements. On a remortgage, your conveyancer will consider the proposed lender’s current requirements, which may differ from those that applied when you bought. Changes in requirements do not ordinarily affect an existing completed mortgage, but they can matter when a lender is asked to make a new lending decision. A short term can also affect the valuation. Requirements differ between lenders, so the outcome can depend on the lender as well as the length of the term.
How the problem usually surfaces
The buyer’s lender raises the lease term
The remaining term does not meet the lender’s requirements. The sale may be delayed while the parties establish whether the issue can be resolved.
A remortgage title check
Nothing at the property has changed, but the term is shorter than when you last borrowed, and the proposed lender’s requirements now apply to it.
The valuation
A surveyor’s figure reflects the unexpired term as well as the property, and the number comes back lower than you or your buyer expected.
The extension quote
You ask the freeholder what an extension costs and the answer is far higher than you assumed, or no clear answer comes back at all.
Fewer potential buyers
The pool of potential buyers may narrow, and offers may be lower than you expected, because the remaining term may not meet some lenders’ requirements.
What you can do about it now
Start with the exact figures. Ask your conveyancer to confirm the unexpired term from the lease and the register, the ground rent and how it is reviewed, because a lender’s requirements may address both.
Then establish your options before spending anything. There is usually a statutory route to extend and an informal deal the freeholder may offer, and the two can produce very different costs and terms. Your conveyancer can advise on what route is currently available to you.
Do not agree an informal extension or serve any notice without advice. The lease continues to shorten, but the rules governing lease extensions are under reform and may affect the available options and costs. Whether to act now or wait depends on your circumstances and the position when you take advice. If you are already selling, ask your conveyancer how an extension could be handled as part of the transaction.
If you are selling, your conveyancer can ask the buyer’s solicitor what remains unresolved and whether it arises from the buyer’s lender’s requirements. If you are remortgaging, your conveyancer can check your proposed lender’s requirements directly.
What happened when you bought?
The length of the lease was a matter of record when you bought. It was written in the lease, it was on the register, and the unexpired term was arithmetic. It has simply got shorter since. So the questions are what the term was then, whether the effect on a future sale or remortgage was explained to you, whether extending was considered at the time, and whether the term was reflected in the price you paid.
Several records from the time may matter, and some may survive. The lease shows the original term and its start date, from which the unexpired term at your purchase can be worked out. The register shows what was recorded. The replies your conveyancer received may show what the landlord or their agent said about extension. A valuation may show how the term was treated. Your report on title may show what you were told about the term and about extending. The conveyancing file draws those strands together. The lender’s historical written instructions may also be difficult to recover, because they are revised regularly and superseded versions disappear from public view.
Was this property really mortgageable when you bought?
Getting a mortgage when you bought does not necessarily tell you how readily mortgageable the property was across the wider market. There are two historical questions worth asking.
What did your own lender’s written requirements say about short leases when you bought? And what express requirements did other lenders have recorded at the same time?
Lenders’ written requirements were not necessarily uniform, and their wording changed over time. That means both which lender you used and when you bought can matter.
Lenders set out in writing what they expect a conveyancer to do about particular features of a property. Those instructions are revised regularly, and superseded versions drop out of public view, which can make a question as simple as what was my conveyancer told about the unexpired term in the year I bought? surprisingly difficult to answer from the sources available today. Lexsure has retained historical lender-specific conveyancing requirements since April 2007, so where the records permit they can help reconstruct what your lender’s requirements said at the time and how that compared with the wider lending market.
Across that period, 42 lenders in our covered archive population have had express requirements about short leases on record, addressed across 2 separate places in their instructions. The earliest express appearance we can identify in the material we hold dates from 2008; the most recent recorded change of wording is 2026.
Two points of precision, because they matter. “Earliest identified” means the earliest express appearance in the material we hold, not the date any requirement began. And where our material for a particular lender and period is incomplete, that lender is left out of these figures rather than counted as having said nothing. We do not treat an incomplete record as showing that the lender had no requirement.
So, when did you buy?
Changing the year here doesn’t send us an enquiry or tell us who you are.
An example of the kind of wording in force 2007 to 2011
One lender’s requirements, not named, by way of illustration. Requirements were not uniform and this is not the wording that applied to your purchase — that depends on your lender and your completion date.
No lender handbook Part-2 (specific) requirements were published prior to . But professionals were still under a duty of care on this topic. It is still worth speaking to us even if the purchase predates .
If we find no express requirement for your lender
Where our material for your lender and period is complete, the answer may simply be that no express wording about the unexpired term appears in it. Where our material is incomplete, we treat that as a gap in what we hold, not as evidence that your lender said nothing.
Either way, the lender’s instructions are only one part of the record from the time.
The wider picture
Historical lender requirements can help us understand how mortgageable the property was when you bought. The conveyancing file and the advice given to you also matter.
Lexsure holds historical Report on Title material: the reports conveyancers sent to homebuyers, going back years. That material shows the kinds of lease term issues that were being addressed when firms reported to buyers, and it is a second and separate record from what lenders required.
Whether the unexpired term was spelled out
Were you told how many years were actually left on the lease at the time you bought, worked out from the term and its start date?
Whether your own lender was checked
Was your proposed lender’s own requirement on unexpired term checked, as distinct from what the wider market was said to require?
Whether selling on was addressed
Were you told the term would keep shortening, and what that could mean for a future sale or remortgage, particularly to a buyer who needs a mortgage?
Whether extending was raised
Was a lease extension discussed, including when to start, the routes available and that the cost generally rises as the term shortens?
These are examples of issues addressed in historical conveyancing material, not a checklist of what every purchaser should have been told. What mattered in an individual purchase depended on the circumstances and on what was known at the time.
So even if your mortgage completed, or there is nothing unusual in your lender’s historical requirements, it can still be worth talking to us about what happened.
Could this problem have been seen coming?
The relevant starting point is what was known, or could reasonably have been identified, when you bought.
What did the lease and the register show? What was the unexpired term on the day you completed? What was in the conveyancing file? What were mortgage lenders requiring at the time? What kinds of short lease issues were conveyancing firms addressing with homebuyers? And what were you actually told?
Taken together, that can help build a picture of whether the problem you are facing today was already something that should have been considered when you bought.
Did you receive the right advice?
What the historical evidence can tell us
Where the relevant lender and period are covered, we may be able to establish what that lender’s conveyancing requirements said when you bought, and how that compared with the wider record at the time.
- That does not by itself establish that anyone was negligent, or that you have a claim. Those questions need the original file and legal advice.
- The absence of express wording does not establish that the lender accepted the issue.
- What your conveyancer had to tell your lender and what they had to tell you are different questions, and the second depends on the retainer and the circumstances.
Time limits apply, and in some cases the date on which you first knew enough about the problem matters as well as the date you bought, which is why we ask about both. Our full methodology, including how we treat gaps in the record, is set out in the archive and its limits. Where a solicitor later needs formal historical evidence, Lexsure can provide source-evidenced historical lender information.
Sources and review
This page is about a residential lease with a shortening unexpired term. Guidance here about the present problem is general information. It is not legal advice about your property. If the landlord or freeholder cannot be traced, see missing or absent freeholder.
Information concerning the current lease-extension framework and proposed reforms has been checked against current government and Leasehold Advisory Service guidance. The legal position must be reverified at each review.
Historical lender information is drawn from Lexsure’s archive of lender-specific conveyancing requirements, maintained since April 2007. Figures on this page state the population they are drawn from.
What the archive holds on short lease
Counts cover substantive changes to lender requirements relevant to this topic in Lexsure’s records. That requirements changed is a fact about the market, not about your purchase.