Leasehold and shared ownership
Leasehold remortgage
Moving the mortgage on your leasehold flat or house to a new lender, including the lease checks and the notices the landlord requires.
Every cost on its own line: the law firm's legal fee, VAT, the searches and other third-party costs, and any property tax. Your quote opens as soon as you send the form.
Remortgaging a leasehold property follows the same basic steps as any remortgage: the title is checked, the new loan pays off the old one and the new mortgage is registered. But a new lender looks closely at the lease too, because the lease is its security. A short term, an unusual ground rent clause or a gap in the insurance arrangements can hold up an offer or the release of funds.
This service is for moving the mortgage on a leasehold flat or house to a new lender, or borrowing more from a different lender. If you are simply switching to a new deal with your existing lender, known as a product transfer, there is usually no conveyancing to do.
Your quote includes the leasehold admin fee and lists any landlord or managing agent fees, to be confirmed once the lease is checked, and it uses your new loan amount to show the HM Land Registry fee, which is based on the amount borrowed. If you go ahead, Keyfolio introduces you to a regulated law firm that acts for your new lender and is used to leasehold titles.
What is involved
Your conveyancer acts for you and, usually, for your new lender:
- Checks and title: verifying your identity and obtaining your title and the registered lease from HM Land Registry.
- Lease review: checking the remaining term, ground rent, insurance and repair clauses against the lender's requirements, and reporting anything that falls short.
- Landlord information: where needed, asking the landlord or managing agent to confirm the service charge and ground rent are paid and the building is insured, and checking whether the lease requires consent to a new mortgage.
- Searches: ordering whatever the lender's instructions call for, although on many remortgages an insurance policy is accepted instead.
- Redemption: obtaining a redemption statement from your current lender.
- Mortgage deed: you sign it, and once the lease and title are cleared the conveyancer sends the lender its report and asks for the money.
- Completion: the new loan arrives, the old mortgage is repaid and any extra money is sent to you.
- After completion: registering the new mortgage at HM Land Registry, removing the old one and giving the landlord notice of the new mortgage as the lease requires.
What the legal fee covers
- Reviewing the lease against your new lender's requirements
- Checking the title and any existing charges
- Raising enquiries with the landlord or managing agent where needed
- Obtaining a redemption statement from your current lender
- Reporting to the new lender and arranging the release of funds
- Repaying the old mortgage on completion
- Registering the new mortgage and removing the old one
- Serving notice of the new mortgage on the landlord
Costs you may see on top
- The leasehold admin fee
- The HM Land Registry fee for registering the new mortgage, based on the amount borrowed
- Landlord or managing agent fees for registering notice of the mortgage or answering enquiries
- Searches, or search insurance where the lender accepts it
- The Land Registry search and bankruptcy searches the lender requires
- Early repayment charges and exit fees on your current mortgage
- Identity checks and the bank charge for sending money
What to have ready
- Your new mortgage offer, or details of the application
- Your current lender's name and mortgage account number
- A copy of the lease, if you have one
- Contact details for the landlord or managing agent
- Recent service charge and ground rent statements
- Photo identification and proof of address for each borrower
How long it takes
A remortgage commonly completes in 4 to 8 weeks once the mortgage offer is issued, and a leasehold remortgage can sit at the longer end of that range or beyond. The usual reasons are waiting for information from the landlord or managing agent, or a lease issue the lender wants resolved first. Sending your lease, the landlord's details and recent service charge statements at the start often saves the most time.
Things to watch for
- Check the remaining term on your lease before you apply. Lenders set their own minimum terms, and a short lease can limit your choice of lender or how much you can borrow.
- Ground rent that doubles or rises with inflation can be a problem for some lenders. If your lease has a clause like this, mention it to your broker at the start.
- Many leases require you to give the landlord notice of a new mortgage and pay a fee. Your conveyancer deals with this after completion.
- If you have extended your lease or made alterations with consent, have the documents ready, as the lender will want to see they were properly completed.
- If your building has cladding or other fire safety concerns, lenders may ask for extra information about the external walls before they lend. Raise this with your broker early.
Questions people ask
Do I need the landlord's permission to remortgage?
Usually not permission as such, but many leases require you to give the landlord notice of a new mortgage within a set time and to pay a registration fee. A few leases require the landlord's consent before the property is mortgaged, and shared ownership leases often limit how much you can borrow. Your conveyancer checks the lease before completion and deals with the notice afterwards.
Why does the new lender care about the lease?
The lease is the lender's security. If you stopped paying, the lender would need to sell the lease, so it wants to be sure the lease is long enough, the ground rent is reasonable, the building is insured and someone is responsible for repairs. If the lease falls short, the lender may ask for it to be put right, which can mean a lease extension or a deed of variation.
What might the managing agent need to provide?
Some lenders ask for confirmation that the service charge and ground rent are paid up, the building is insured and no major works or disputes are pending. If so, your conveyancer asks the managing agent, who may charge a fee and take a week or two to reply. Sending the managing agent's details at the start helps avoid a delay close to your completion date.
Can I remortgage to pay for a lease extension?
Often yes. Some lenders will lend on the basis that the lease is being extended, with the extension and the remortgage completing together, while others want the extension finished first. Your broker can check the lender's approach, and your conveyancer can coordinate the timing with the lease extension work.
Who does the work
Your matter is handled by a law firm regulated by the Solicitors Regulation Authority, the Council for Licensed Conveyancers or CILEx Regulation, or in Northern Ireland by a solicitor regulated by the Law Society of Northern Ireland. At the moment the law firms on our panel act for property in England and Wales, so for property in Northern Ireland we tell you whether a firm can act for you before we pass your details to anyone. The firm confirms who will work on your file, their experience and its terms before you instruct it. How we choose our firms.