Every broker has had the call: offer accepted on a flat, buyer delighted, and the lease has 74 years left. From that point the purchase is a finance problem, not a property problem.
Lease length, ground rent and building safety are the three criteria that most often make an otherwise ordinary flat unmortgageable. Here is where the lines actually fall in 2026.
Lease length: the rule most lenders apply
There is no single market standard, but the common formulations are:
- Term plus 30 or 40 years. A 25-year mortgage needs 55 to 65 years unexpired at the start, so the lease still has meaningful term at redemption.
- A minimum unexpired term at completion — typically 70 to 85 years.
In practice, anything under about 85 years starts narrowing your options, and under 70 years mainstream residential lending largely disappears.
The reason is not arbitrary. A lease is a wasting asset, and its value falls away as the term shortens — so the lender’s security erodes over exactly the period it is lending across.
Why 80 years is the number that costs money
Under the law as it currently stands, once a lease drops below 80 years, extending it becomes markedly more expensive because marriage value becomes payable — broadly, half the uplift in value created by the extension goes to the freeholder.
Be precise about the reform position, because a great deal of misinformation circulates. The Leasehold and Freehold Reform Act 2024 is on the statute book, but the measures that matter financially — 990-year extensions at a peppercorn and the abolition of marriage value — depend on secondary legislation and a valuation framework that are not yet in force. A further draft Commonhold and Leasehold Reform Bill has since been introduced. Commentators widely expect the new valuation rules no earlier than 2027.
Do not price a purchase, or defer a lease extension, on the assumption that cheaper statutory terms arrive shortly.
Ground rent: the clause that fails the survey
Escalating ground rent is now a standard underwriting check. Two tests recur:
- Ground rent exceeding 0.1% of the property value is treated by many lenders as a defect.
- Doubling clauses, or reviews linked to RPI at short intervals, are frequently declined outright.
Leases granted since the Leasehold Reform (Ground Rent) Act 2022 came into force are limited to a peppercorn, so new-build stock is usually clean. Older leases are not, and a deed of variation may be needed before any lender will proceed.
Building safety and cladding
On blocks above a certain height, lenders will want an EWS1 form or evidence the building falls outside scope. An unresolved cladding position, or a live remediation scheme with an uncertain cost allocation, will stop most applications. Establish the building’s position before you offer, not after the valuation.
The other criteria that catch people out
- Service charge arrears or a managing agent in dispute.
- Ex-local-authority blocks, particularly deck-access or above four or five storeys — many lenders restrict or decline.
- Flats above commercial premises, especially hot food, licensed premises or anything with noise or odour implications.
- Concentration limits — lenders often cap exposure to a single development, so a large new scheme can be closed to your lender even if you qualify.
- Share of freehold is usually helpful, but the underlying lease still needs to be long, and the freehold company’s accounts and insurance need to be in order.
If the flat is outside mainstream criteria
You are not necessarily stuck.
- Ask the seller to extend the lease before completion. With over two years’ ownership they have a statutory right, and the notice can be assigned to you on completion. This is the cleanest answer and it is worth building into the negotiation.
- Specialist lenders do lend on shorter leases, at higher rates and lower loan-to-values.
- Bridging finance can complete the purchase, fund the lease extension, and be refinanced onto a term mortgage once the lease is long enough. It works, but only with a costed extension premium and a credible exit.
- Renegotiate. A lease problem is a valuation problem, and the price should reflect it.
What to check before you offer
Get the exact unexpired term in writing, the ground rent and its review mechanism, three years of service charge accounts, the reserve fund balance, any live or anticipated section 20 major works, and the building safety position. Five minutes of questions at offer stage saves two months at application stage.
Buying a flat and unsure whether it will mortgage? Send us the lease details before you offer — we will tell you where it sits with lenders.
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Giles Finance is authorised by the Financial Conduct Authority (No. 726857) to transact regulated mortgages. Giles Finance is a trading style of Giles Finance & Consultancy Services. This article is general information, not advice; the right answer depends on your circumstances.