"Equity release and other later life lending products can offer a solution for older people who are facing watching the value of their home gradually decrease"
55% of older homeowners who own a leasehold property want to buy the freehold or extend the lease, according to research from Key.
Homes owned on a leasehold basis account for around one in four sales a year and once a property has less than 80 years left on the lease, it becomes more expensive to extend the lease. In certain circumstances buyers can find it difficult to get finance to purchase the property.
Key’s study found that 41% of over-55s with leasehold properties have terms of less than 80 years to run and nearly one in five (18%) have less than 50 years left on their lease.
27% of over-55s admitted to feeling uneasy or disappointed when they first realised the home they were buying was leasehold. Nearly three out of four (74%) say if they were buying again it would be critical the next property was freehold.
The research revealed that over-55s are aware of the challenges with 15% saying they cannot afford to buy the leasehold, 14% believing they can’t afford to extend the lease and 12% said the process is too daunting.
Will Hale, CEO at Key said: “The vast majority of people don’t fully consider the implications of buying one of the UK’s 2.3 million leasehold properties but the longer they live in it, the more likely they are to need to consider extending lease or buying the freehold. This can be a costly and time consuming process – especially if you are on a fixed retirement income or working hard to build up your pension savings.
“Equity release and other later life lending products can offer a solution for older people who are facing watching the value of their home gradually decrease as the number of years on their lease falls. We have seen an increase in people using their housing equity to fund the purchase of a freehold or to extend their lease as well as to help meet other needs or wants in retirement.
“Good expert advice is key to ensuring that older homeowners receive the most benefit from their property wealth and use it in the most appropriate way for them and their families. Anyone considering buying a freehold or extending their lease should get legal advice or use the Government-funded free independent Leasehold Advisory Service.”