Leasehold homes make up roughly one in five properties in England & Wales, yet many over-55s assume they’re automatically barred from unlocking cash through equity release.

The truth is more nuanced.

While leasehold brings extra caveats—chiefly around lease length, ground rent and service charges—thousands of leaseholders successfully take out lifetime mortgages every year.

This friendly yet informative guide explains how it works, what lenders look for and the pitfalls to avoid.

We’ll point you toward helpful resources on Timebank.org.uk, such as Types of Equity Release and Equity-Release Costs, so you can decide confidently whether your leasehold home can—and should—be used to raise tax-free cash.

Leasehold vs Freehold: Why It Matters

With freehold, you own the building and the land outright.

With leasehold, you own the right to occupy for a set number of years and pay ground rent or service charges to the freeholder.

Because a lease is, in effect, a diminishing asset, lenders must assess how its value will hold up over time.

The shorter the lease, the faster that asset declines—raising concerns about future resale value and the lender’s ability to recoup their loan.

Understanding this dynamic is as important as grasping interest rates or other core features when considering equity release.

Minimum Lease Terms: The Magic Numbers

Most lifetime-mortgage providers insist on at least 75–85 years remaining at the point you take the loan, and a minimum of 30–50 years remaining at your projected age of 95.

Meeting this threshold reassures lenders that the property will remain marketable when the plan ends.

Some specialist firms accept shorter terms but may reduce the amount you can borrow or charge a higher rate.

Use our Equity-Release Calculator to model different loan-to-value scenarios and see how lease length affects the figures.

Ground Rent and Service Charges

Escalating ground rent clauses are a big red flag.

If the rent doubles every 10 years—or exceeds £250 (£1,000 in London)—many lenders will walk away, fearing future buyers might struggle to secure a mortgage.

Peppercorn or RPI-linked ground rent is usually fine.

Service charges must also be realistic.

Lenders will request recent statements to check that maintenance costs won’t erode your ability to meet everyday bills.

Think of it as a parallel to scrutinising pros and cons: recurring charges can shrink the real benefit of any cash you release.

Product Choice: Lifetime Mortgage vs Home Reversion

Leaseholders overwhelmingly choose lifetime mortgages because you keep legal ownership.

Home-reversion firms—who buy a share of your home—are fussier about lease terms and may insist on a fresh lease extension before proceeding.

If flexibility matters, investigate drawdown products that let you tap funds in stages.

Our guide on the Drawdown Lifetime Mortgage shows how this can keep interest costs in check while meeting ad-hoc spending needs.

Picking a Lender: Not All Policies Are Equal

Big names like Legal & General or Aviva often accept leasehold, provided the term is long enough.

Others appear on our watch-list of Equity-Release Companies to Avoid because they impose onerous conditions or poor customer service.

Work with advisers who understand the nuances; our list of Best Equity-Release Companies highlights brokers and lenders known for leasehold expertise.

Extending Your Lease Before or After Release

If your lease is borderline, extending it first can unlock higher loan-to-values and better rates—but expect solicitor fees, valuation costs and possibly a statutory premium.

Budget these alongside core equity-release costs to avoid surprises.

You can, in theory, extend after taking out equity release, yet timing is crucial: the lender must consent and may cap borrowing until the new lease is registered.

A proactive approach usually saves money and hassle.

Common Pitfalls and How to Avoid Them

Leasehold retirement flats, properties with cladding issues and homes in large complexes can all face additional scrutiny.

Our deep-dive into Equity-Release Pitfalls lists red flags to watch for.

Another trap is under-budgeting for rising service charges, which can eat into the cash you release.

Annual reviews of your building’s accounts—and a hearty contingency fund—will keep your plan on track.

Alternatives if You Don’t Qualify

If your lease is too short or ground rent too high, you still have options.

Remortgaging into a Retirement Interest-Only mortgage, downsizing or renting out a spare room could bridge any income gap.

Our article on Alternatives to Equity Release walks through each route, helping you weigh costs, flexibility and long-term impact.

Common Questions

Conclusion

Yes, leasehold properties can qualify for equity release—provided the lease length, ground rent and service charges meet lender criteria.

By auditing your lease, choosing a flexible provider and budgeting for future costs, you can unlock cash without scuppering the home’s resale value.

Ready to explore further? Start with How Does Equity Release Work? and speak to a specialist adviser who understands leasehold nuances.

With the right preparation, your apartment or maisonette could be every bit as eligible as a freehold bungalow.