Equity Release on Leasehold Properties: Is It Possible? (2026)
Yes — leasehold properties are accepted for equity release by most providers. The key requirements are sufficient years remaining on the lease, reasonable ground rent, and acceptable service charges. Here's what you need to know.
Yes — most providers accept leasehold properties for equity release. The key requirements are: 75–90 years remaining on the lease after the expected loan term, reasonable ground rent (not escalating excessively), and acceptable service charges. Freehold is preferred, but leasehold is far from a barrier.
Contents
Lease length requirements
The most important factor for leasehold equity release is the remaining lease term. Lenders need to be confident that the lease will not expire during the expected lifetime of the plan.
| Provider Type | Minimum Lease Remaining | Notes |
|---|---|---|
| Mainstream providers | 75–90 years after expected term | Most common requirement |
| More flexible providers | 60+ years remaining | May accept shorter leases with conditions |
| Stricter providers | 100+ years remaining | Conservative approach |
| Shared ownership | Varies significantly | See our guide on shared ownership |
The 'expected term' is based on your age and life expectancy. For a 70-year-old, the expected term might be 15–20 years. So the lender would want 75–90 years remaining at the time of application.
If your lease is too short, you may need to extend it before applying for equity release. This is usually possible if you have owned the property for at least 2 years, but it takes time and costs money.
Ground rent and escalating clauses
Ground rent is the annual fee you pay to the freeholder. Lenders scrutinise ground rent terms because excessive or rapidly escalating ground rent can affect the property's value and your ability to afford ongoing costs.
Problems arise with doubling ground rent clauses — where the ground rent doubles every 10 or 25 years. These clauses have received significant media attention and can make properties difficult to sell or mortgage. Some lenders will not accept properties with doubling ground rent clauses.
Reasonable ground rent is typically:
- Fixed: A set amount that does not increase, or increases only with inflation (RPI).
- Low: Typically under £250 per year for flats and under £500 per year for houses.
- Peppercorn: Some modern leases have a 'peppercorn' ground rent (effectively zero).
If your ground rent is high or escalating, speak to your adviser. They may recommend a provider with more flexible leasehold criteria, or suggest negotiating a deed of variation with the freeholder.
Service charges and management
For leasehold flats, service charges cover the maintenance of communal areas (hallways, gardens, lifts, roofs). Lenders want to see that:
- Service charges are reasonable and predictable — not subject to sudden large increases.
- The building is well-managed — no significant maintenance backlogs or disputes.
- There is a reasonable sinking fund — money set aside for major works.
- There are no major works planned that would require a large one-off payment from leaseholders.
The lender's surveyor will review the service charge history and the management company's accounts. If there are concerns, the lender may ask for additional information or impose conditions.
Extending your lease before applying
If your lease is too short for equity release, you have the right to extend it under the Leasehold Reform Act (if you have owned the property for at least 2 years). The process:
- Serve a Section 42 notice on the freeholder, stating your intention to extend the lease.
- Negotiate the premium — the cost of the extension. This depends on the property value, the remaining lease term, and the ground rent.
- Pay the premium and legal costs — typically £5,000–£15,000 for a 90-year extension, though this varies widely.
- Complete the legal process — usually takes 3–6 months.
Some equity release providers will allow you to use part of the released funds to pay for the lease extension. However, this adds complexity and time to the process. Your adviser can help you decide whether to extend the lease first or incorporate it into the equity release plan.
Leasehold flats vs leasehold houses
Leasehold flats and leasehold houses are treated differently by equity release providers:
| Factor | Leasehold Flat | Leasehold House |
|---|---|---|
| Acceptance | Widely accepted | Accepted by fewer providers |
| Minimum lease | 75–90 years typical | 90–100 years typical |
| Ground rent | Usually lower | Can be higher; doubling clauses more common |
| Service charges | Always applicable | May or may not apply |
| Estate charges | May apply | Often apply (for estate maintenance) |
Leasehold houses have received negative media attention due to onerous lease terms (particularly doubling ground rent and high estate charges). Some providers are cautious about leasehold houses as a result. A whole-of-market adviser can find the most suitable provider.
See how much your leasehold could release
Enter your age and property value. Most leasehold properties qualify — the key is sufficient years remaining on the lease.
People Also Ask
It depends on your age. If you are 70 and the lender wants 75 years remaining after the expected term, 80 years may be too short. If you are 80 and the expected term is 10 years, 80 years may be sufficient. Your adviser can calculate this.
Doubling ground rent clauses are problematic. Some providers will decline the application. Others may accept it if the current ground rent is low and the doubling is far in the future. Seek a whole-of-market adviser.
In theory, yes. However, buying the freehold is a complex legal process that takes months. Most equity release providers prefer the freehold purchase to complete before the equity release, or as a separate transaction.
The freeholder will be notified because the lender registers a charge against the property, similar to a standard mortgage. The freeholder cannot block the equity release, but they may need to acknowledge the charge.
Some retirement flats are eligible, but many are not. Factors include: whether the property is independently saleable, the length of the lease, and any age restrictions on resale. Specialist advice is essential.
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Reviewed by Chris, CII-qualified equity release specialist · Last reviewed July 2026