Published 23 August 2013 · Last reviewed 1 May 2026

Ever thought of buying a place in Central London, extending the lease then selling it on – But how do you get finance for a lease extension in central London 

Central London has traditionally been a haven for desirable properties with short leases and the potential for extending them and selling them on is colossal.

You may have watched renovation programmes on the television often fronted by an entrepreneur with a fleet of workman at their disposal. They buy cheap, put in a new kitchen, bathroom and drive – and paint it magnolia – and make a turn.

The beauty of the ‘short lease extension concept’ is there is the demand for the property is always there and you do not have to involve all and sundry – all that is needed is a lender, Central London Specialist Finance Broker (such as Niche), and a solicitor.  

How Can I Finance A Lease Extension?

This is best described by an example. Marion wants to purchase a flat hear Hyde Park in central London. Its purchase price is just £600,000 which is due to the fact the lease only has 10 years left to run. To extend to the lease to 99 years will cost her a further £500,000. The vendor Peter has been unable to attract a buyer. He thought this was down to the fact they would need to be a ‘cash’ buyer as a traditional mortgage lender would not help finance the deal.

Marion knows once the property has a lease extension she can sell it on for £1,500,000.

Marion has thirty percent of the end value to put down i.e. £450,000 (based on an end value of £1,500,000 which includes the purchase with lease extension).

She stands to make £1,500,000 for on outlay of £1,100,000 (£600,000 purchase price plus the cost of the £500,000 lease extension). That is an approximate turn of £400,000 without the need for a decorator to lift a brush

To fund this project she needs to borrow £1,500,000 – £450,000 (her deposit) = £1,050,000.

What Are The Costs Of Financing A Lease Extension In Central London?

£1,050,000 was on finance at a rate of 0.65% per calendar month. This equates to £6,825 per month so you ideally need to have buyers lined up, which given the Central London location should not be difficult.

Table on the Finance cost for lease extension depending on ownership period

There is the cost of a valuation which is roughly £1 per £1000, in this case £1,500.

The Lender and Specialist Finance Broker will each charge an admin fee which is normally 1 to 2% of the loan size.

The legal costs about £1,500 exc vat to pay for the Lenders and your representation.

All these figures need to be deducted from £400,000 profit so obviously the quicker the sale the more margin.

Where Do I Obtain The Finance From For A Lease Extension?

The lease extension finance is not available from the traditional mortgage lenders (unless the lease still has at least 55 years to run), therefore Specialist Finance needs to be arranged. It is sensible to approach an expert based in Central London such as Niche Funding who are familiar with these types of initiatives.

Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.