Equity release can help older homeowners with a leasehold property buy the freehold or extend the lease, equity release adviser Key has claimed.
Key found more than two in five (41%) 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.
Some 27% of over-55s admitted to feeling uneasy or disappointed when they first realised the home they were buying was leasehold.
Furthermore, over half (55%) of older homeowners with leasehold properties are looking to extend the lease or buy the freehold.
Will Hale, chief executive 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.”
Typically, extending a lease or purchasing a freehold can cost thousands and the longer it is left the more expensive it becomes.
Mortgage lenders can be reluctant to lend on a property with fewer than 70 years left on the lease.
Over-55s are aware of these challenges with 15% saying they cannot afford to buy the leasehold, 14% believing they can’t afford to extend the lease and 12% claiming the process is too daunting.