If you own or are looking to buy a high-value London property with a short term lease, securing the right financing can be a challenge. Many traditional mortgage lenders are hesitant to approve loans for properties with a diminishing lease, making it difficult to buy, sell, or refinance. However, bridging loans provide a smart and flexible solution, allowing homeowners and investors to extend their lease, boost property value, and secure long-term finance.
Why short term lease extensions matter
In prestigious areas like Mayfair, Kensington, and Chelsea, leasehold properties make up a significant portion of the market. However, as a lease falls below 80 years, several issues arise:
- Limited mortgage availability – Many lenders see short lease properties as too risky.
- Declining property value – A shorter lease reduces a home’s worth, making it less attractive to buyers.
- High lease extension costs – When a lease falls below 80 years, “marriage value” kicks in, significantly increasing extension costs. While reforms are expected, they are not yet in place.
If you’re looking to buy or already own a property with a short lease, acting quickly is essential to protect your investment and maximise its value.
How bridging loans help with short term lease extensions
Bridging loans provide fast, flexible funding to help you secure or extend a short-term lease. Whether you’re purchasing a leasehold property or refinancing an existing one, there are two key ways bridging finance can help:
1. Buying a property with a short lease
If you’re purchasing a property with a short lease, securing a mortgage can be difficult. A lease extension bridging loan allows you to:
- Buy the property and extend the lease at the same time
- Increase its market value and mortgage eligibility
- Refinance onto a standard mortgage once the extension is complete
2. Extending a lease on an existing property
If you already own a short-lease property and need to extend it but don’t have the upfront capital, a bridging loan can help. This short-term finance solution allows you to:
- Extend your lease without delay
- Boost your property’s value
- Secure a long-term mortgage at a competitive rate
Why a bridging loan is the right solution
Bridging loans are specifically designed for scenarios where traditional lenders won’t provide funding. They offer:
- Fast approvals and funding – Ideal for time-sensitive transactions, such as auction purchases
- Flexible lending criteria – Acceptable for properties that don’t meet standard mortgage conditions
- Tailored solutions – Loans can be structured to cover both the property purchase and lease extension costs
Work with experts in short-term lease financing
Navigating short-lease extensions and bridging finance can be complex, especially when dealing with high value properties in London’s most sought-after postcodes. That’s why working with specialist finance brokers is crucial. A trusted specialist finance expert can:
- Help you access the right bridging loan for your situation
- Guide you through lease extension negotiations
- Ensure you secure the best terms and avoid costly pitfalls
Secure your future today
If you’re looking to extend a short lease or purchase a leasehold property in an affluent London area, expert advice and the right financial solution can make all the difference.
Get in touch today to explore your options and secure the funding you need to protect your property investment.
