450,000 homeowners in England and Wales are at risk of becoming mortgage prisoners because their leases have run down to less than 75 years, the crucial threshold for mortgage finance, including lifetime mortgages.

The data compiled by Lifetime Mortgage Gateway Logistics (LMGL) shows there are currently an estimated 400,000 leaseholders in England and Wales with leases of less than 75 years, which are generally considered too short to qualify for mortgage finance, including lifetime mortgages.

This figure is set grow over the next five years as another 50,000 leases drop below the critical 75-year point.

The other issue is that homeowners who are trapped with a “mid-term” lease also find that their property loses some value every year unless they extend their lease. It is because of this loss of value that mortgage providers will generally not lend and why there are no lifetime mortgages available to these leaseholders.

Furthermore, the lease extension or the ‘right to buy’ process can be complicated and expensive. Without a lease extension, homeowners are unable to access equity.

LMGL has stated “It doesn’t matter if you live in London or Birmingham, if your lease has less than 75 years left to run and you don’t do anything about it, the reality is most mortgage lenders will not want anything to do with you, leaving you with no possibility at all of a lifetime mortgage.

The only way you can arrest the slide in value is to extend your lease by 90 years.”

For those that are middle aged and looking to stay in their lease hold properties long-term and who might be considering a ‘lifetime mortgage’ later on in life, we suggest that now is the right time to review and extend the lease on your property so that when the time comes, you don’t fall foul of the 75 -year rule.