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Question: 5.10.1. What minimum unexpired lease term do you accept?
| Lender | Answer |
|---|---|
| Accord Mortgages Ltd |
85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Atom Bank plc | At least 80 years at the outset of the mortgage and at least 50 years remaining at the expiry of the mortgage term. |
| Aviva Equity Release UK Ltd |
160 years minus x Where x = the age of the younger borrower |
| Bank of Ireland (UK) plc |
Yes, subject to a minimum lease term of 85 years. The unexpired lease term must be at least the mortgage term plus 45 years. See also 5.10.7 |
| Bank of Ireland as Bank of Ireland Mortgages |
Yes, subject to a minimum lease term of 85 years. The unexpired lease term must be at least the mortgage term plus 45 years. See also 5.10.7 |
| Bank of Scotland Beginning A |
Minimum 70 years from the date of the mortgage. |
| Bank of Scotland Beginning O |
Address & telephone number on Mortgage Offer |
| Barclays Bank UK PLC |
Leases with less than 70 years at the commencement of the mortgage are not acceptable (see exception below) and should be declined. Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires |
Minimum 70 years from the date of the mortgage. |
| Bradford & Bingley Limited |
The lease must have at least 25 years remaining at the end of the mortgage term. |
| Britannia, a trading name of The Co-operative Bank plc | Minimum 85 years unexpired from completion. |
| Chelsea Building Society (a trading name of Yorkshire BS) |
85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| CHL Mortgages |
At least 35 years in excess of the mortgage term |
| Co-operative Bank plc | Minimum 85 years unexpired from completion. |
| Coventry Building Society | A minimum of 70 years unexpired lease for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years. |
| Danske Bank | The lease must have a minimum unexpired term of 85 years at the time of completion. |
| DB UK Bank Ltd | Mortgage term plus 40 years |
| Ecology Building Society |
Mortgage term plus 35 years |
| First Direct | All Residential leasehold properties must have more than 30 years remaining on the lease beyond the term of the mortgage at the outset. |
| First Trust Bank | 60 years remaining at expiry of mortgage term. |
| GE Money Home Lending Ltd | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Godiva Mortgages Ltd | A minimum of 70 years unexpired lease for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Halifax Loans Ltd | Minimum 70 years from the date of the mortgage. |
| Hampden & Co. plc | |
| HSBC UK Bank plc |
All residential leasehold properties must have more than 30 years remaining after completion of the term of the mortgage. If the above criteria is met, however the unexpired term at the outset has less than 85 years remaining, this will always be subject to a Valuer’s opinion and must be referred to us for approval. The Valuer must be satisfied that there is a market for any property taking the lease into consideration. All Buy to Let leasehold properties must have more than 35 years remaining after completion of the term of the mortgage. If the above criteria is met, however the unexpired term at the outset has less than 85 years remaining, this will always be subject to a Valuer’s opinion and must be referred to us for approval. The Valuer must be satisfied that there is a market for any property taking the lease into consideration. |
| HSMS |
Yes, after completion with the title deeds. |
| Intelligent Finance | Minimum 70 years from the date of the mortgage. |
| ITL Mortgages | A minimum of 70 years unexpired lease for all scheme types apart from Lifetime Mortgages(Equity Release),which require a minimum unexpired term of 80 years. |
| Kensington Mortgage Company Ltd | 70 years from the date of completion of the mortgage. |
| Landmark Mortgages Limited | The Mortgage Term plus 30 years. |
| Leeds Building Society | 85 years from the start of the mortgage. |
| Lloyds Bank plc | Mortgage term plus 30 years subject to an overall minimum term of 70 years. |
| Lloyds TSB Scotland plc | Minimum 70 years from the date of the mortgage. |
| M&S Bank |
All leasehold properties must have more than 30 years remaining on the lease beyond the term of the mortgage at the outset |
| Mortgage Express |
The lease must have at least 25 years remaining at the end of the mortgage term. |
| Mortgage Express (No 2) |
The lease must have at least 25 years remaining at the end of the mortgage term. |
| National Westminster Bank plc | Mortgage term plus 30 years. |
| Nationwide Building Society |
Must be at least 50 years longer than the Mortgage. Where lending is over 85% of the purchase price/valuation on a second hand flat, our minimum unexpired term is 90 years. Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed: Second hand property: - If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years - if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported - For equity share applications - advise us if the actual lease term is different than reported on the offer - Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years. New build property: - If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house) - For equity share applications - always advise us if the actual lease term is different than reported on the offer Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below. SECOND HAND PROPERTIES Unacceptable - advise Issuing Office (Will be declined): - Unexpired lease term less than 55 years - Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat - Less than 30 years remaining at the end of the mortgage term - Ground Rent greater than 0.5% of the property value - Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) – acceptable if doubles every 20 years or more - Ground Rent is compounded RPI - Ground Rent review period less than or equal to 5 years Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability): - Unexpired lease term is 55 to 85 years - Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value - Ground Rent escalation is linked to any indices greater than RPI - Ground Rent escalation is linked to the value of the building* - Ground Rent review period is greater than 5 and less than 10 years - Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc - Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover) - Service Charges greater than 1% of property value p/a (please provide details of what the charges cover) - Anything that appears onerous, unusual or out of the ordinary Acceptable (no requirement to advise Issuing Office): - Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat) - Ground Rent less than or equal to 0.1% of the property value - Ground Rent review period greater than or equal to 10 years - Ground Rent escalation less than or equal to RPI NEW BUILD PROPERTIES (includes office conversions) Unacceptable - advise Issuing Office (Will be declined) - Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership) - Starting Ground Rent greater than 0.1% of the property value - Ground Rent review period less than or equal to every 5 years - Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more - Ground Rent is compounded RPI Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability): - Ground Rent is linked to any indices greater than RPI - Ground Rent is linked to the value of the building* - Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc - Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover) - Service Charges greater than 1% of property value p/a (please provide details of what the charges cover) - Anything else appears onerous, unusual or out of the ordinary Acceptable (no requirement to advise Issuing Office): - Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house - Starting Ground Rent less than or equal to 0.1% of the property value - Ground Rent review period greater than 5 years - Ground Rent escalation less than or equal to RPI * Where the Ground Rent escalation is linked to the value of the building, please provide the following: - How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? - The current valuation and Ground Rent for each unit - What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned? - What is the right of appeal? And is this a documented process within the lease? - Who bears the cost of the valuation (and appeal) process? - Confirmation the review period is not less than twenty years |
| New Street Mortgages | 85 years from the date of completion of the mortgage. |
| NRAM Ltd | The Mortgage term plus 25 years |
| Platform (a trading name of The Co-operative Bank p.l.c.) |
Minimum 85 years unexpired from completion. |
| Rooftop Mortgages Ltd |
A minimum unexpired lease term of 50 years at the beginning of the mortgage term and a minimum unexpired lease term of 35 years at the end of the mortgage term |
| Sainsbury's Bank | The unexpired term should be no less than 85 years at the commencement of the mortgage term. |
| Santander UK plc |
You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis |
| Scottish Widows Bank | Minimum of 70 years unexpired at the start of the mortgage. |
| The Mortgage Business |
Minimum 70 years from the date of the mortgage. |
| The Royal Bank of Scotland plc |
100 years. |
| TSB Bank plc | Mortgage term plus 30 years subject to an overall minimum term of 70 years |
| UCB Home Loans Corporation Ltd |
Mortgage term plus 30 years. |
| Ulster Bank |
Mortgage Term plus 30 years. |
| Virgin Money | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire Building Society |
85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |