Legal Q&A: I want to remortgage my studio flat so I can extend my lease but my lender says it's too small to qualify - help!

My flat has been measured as 28 square metres but it needs to be 30sq m to qualify for remortgaging. I need to remortgage it to pay for an extension on my lease. What can I do?
Merrily Harpur
Fiona McNulty30 April 2018

Question: I am trying to remortgage my studio flat so I can extend my lease. The lender's valuer has measured the flat as 28 square metres but it needs to be 30sq m to qualify to remortgage. When I bought it four years ago the mortgage valuation measured it at 30sq m and I have the paperwork showing that. My freeholder also says the flat is 30sq m. Will the size of the flat affect the price for the lease extension, and what can I do about my remortgage?

Answer: If you haven't already done so, it would be wise to seek advice from an independent chartered surveyor specialising in lease extensions, who will be able to advise you regarding the value of the extension and can also measure your flat for you.

There is a complex procedure for calculating the premium payable for a lease extension and several factors are taken into account — for example, the reduction in value of the landlord's interest in the studio flat; the landlord's loss of ground rent during the extended term of the new lease; the value of the property, and the length of the unexpired term of the lease.

Some lenders will not lend on studio flats. However, most of those that will often require the flat to be a minimum size of 30 square metres. If you are using the same mortgage lender for your remortgage, point out to them the discrepancy in their valuer's measurements and remind them of the content of their original valuation. A few lenders will lend on studio flats of less than 30sq m, so you could apply to one of them if your current lender will not oblige.

These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.

If you have a question for Fiona McNulty, please email legalsolutions@standard.co.uk or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE.

We regret that questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.

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