Turn short-lease problems into real opportunities

Losing clients to short leases? You’re not alone…

Have you ever lost a client because their lease term was too short?
It’s incredibly frustrating. The client disappears, the freeholder takes over, and you’re left with nothing to show for all your hard work.

But short leases don’t have to mean lost business.

The scale of the missed opportunity

According to combined data from ONS, HM Land Registry and Ordnance Survey, 1 in every 25 residential homes across England and Wales have leases under 90 years (with an average lease term remaining of just 55 years).

You’ll know from meeting older homeowners in this position that many have the same financial needs and aspirations as other later life clients, but can’t access equity release due to their lease length.

That’s a huge segment of potential clients being excluded from the market.

What it means in numbers

Equity release lending reached £2.3bn in 2024, based on Equity Release Council (ERC) data. If short-lease clients had been included, that could have meant an additional £87m in lending, and around £2.6m in lost proc fees for advisers (based on an average 3% fee).

The missed opportunity doesn’t stop there. If we take an average property value of £420k (the typical value of an equity release client’s home, according to the ERC), then:

The average lease extension premium would be approximately £56k (based on the HM Land Registry figures mentioned above)

Then in addition the customer may need or want to release extra cash to pay for home improvements, repay existing debts or to gift to their family

This could equate to a proc fee potential of around £5k per client.

That’s meaningful income currently being left on the table, not to mention the client relationships that could have been retained and of course referral opportunities to others in a similar position living in the same block.

Why advisers walk away

Let’s be honest: converting these clients takes work.

It’s not your job to be explaining leasehold ownership, the extension process, and legal costs, and it’s time-consuming. It’s why so many advisers refer clients to freeholders and never hear from them again.

Until now, that approach made sense. The process felt complex and slow because, well, it WAS complex and slow.

But now there’s a smarter, simpler alternative.

The Lifetime Mortgage Gateway solution

At Lifetime Mortgage Gateway (LMG), we’ve created a professional referral service designed to make short-lease cases straightforward for advisers and deliver a better outcome to their clients.

Here’s how it works:

1. You refer the client to us

2. We educate and mentor them about lease extensions and their options

3. We hand the client back to you, fully informed and ready for equity release advice

4. Our trusted expert partners, Savills (valuers) and Bishop & Sewell (legals), provide specialist advice and support and they can act for the customer at low, fixed fees

It’s a better outcome for everyone:

The client understands their position and next steps

You retain control of the relationship and unlock a new revenue stream

We handle the technicalities, ensuring the process runs smoothly

Leasehold reform: A game-changer which has recently made significant progress toward becoming a reality.

The Leasehold and Freehold Reform Act 2024 could reduce lease premiums by up to 50% (subject to final rates). The freeholders recently lost their Human Rights claim against the Government, effectively saying the new Act wasn’t fair to them. The Court didn’t agree with any of their case. They may appeal, but change is coming sooner than expected.

Good news for the customer and brokers as it could mean:

Lower costs for clients

Cheaper lease extension premiums, so less of the LTM spent on the lease extension premium and more can be used as cash

Greater opportunities for advisers to convert previously rejected cases

Now is the time to position yourself for this growing market, with a referral partner who understands this market, the legislation and how to unlock the opportunity for you and your clients.

What you can do next

Don’t let short leases be the end of the conversation.

At LMG, we believe in demystifying the short lease extension process and empowering advisers to deliver better financial outcomes to their clients. As part of that endeavour, we’ve launched the UK’s first Lease Checker, a FREE online tool that you can use to quickly and accurately check the remaining term of any leasehold property in the UK.

Try it for yourself today: https://lmglogistics.co.uk/

Not only that, but for a limited period we will pay advisers who introduce clients to our service a referral fee of £100 once the lease extension process is funded and the client can proceed to the next stage of completing their equity release loan.

With LMG, short leases are no longer a conversation-stopper. They can become the start of a bigger opportunity and a better financial outcome, for your clients and your business.