not sure this is the right place ?

Debfro

But here goes

Hi I am hoping someone on here may be able to help me. My FIL has just died and while looking for his funeral plan we have come across a policy with NPI which says in 2001 he sold 66% of his house for £15000 and the rest for £9000 3 years later. The house was valued at £165000. He was 73 and I am sure this cannot be right can it? Is there anything we can do? How can a company buy a £165000 house for £24000? Is this legal?

PasturesNew

http://www.telegraph.co.uk/finance/4459319/Warning-on-equity-release-schemes.html
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/2772692/Equity-release-springs-its-trap.html

BettiePage

Debfro wrote: »

But here goes

Hi I am hoping someone on here may be able to help me. My FIL has just died and while looking for his funeral plan we have come across a policy with NPI which says in 2001 he sold 66% of his house for £15000 and the rest for £9000 3 years later. The house was valued at £165000. He was 73 and I am sure this cannot be right can it? Is there anything we can do? How can a company buy a £165000 house for £24000? Is this legal?

£15000 + £9000 = £24000

Or did you miss a couple of zeros off?

Debfro

Twenty four grand for a one hundred and sixty five grand house. Sorry I am rubbish at numbers !

DVardysShadow

Debfro wrote: »

How can a company buy a £165000 house for £24000? Is this legal?

All they have to do is find a willing seller. Of course it was legal for him to sell at whatever price he was happy with, but even if it is illegal, it is too late to prosecute him now.

Bear in mind

• The house was probably worth about £80,000 in 2001 and about £120,000 in 2003. On a rough calc they got it at 25% of contemporary value
• I imagine he then lived in it rent free with lifetime security of tenure

The value of houses with protected tenants who cannot be evicted is only a fraction of the value with Vacant Possession.

I imagine he was swindled, but given the above, not out of £141,000 [the difference between £165,000 and £24,000]. More likely he got about 60% of the value he 'should have had' under such a deal

Debfro

The house was worth £165k in 2001. I still think £15k for 66% is a swindle. They were both already showing signs of dementia although neither were diagnosed until 2005 and 06. I think its terrible anyone is allowed to do this.

DVardysShadow

Debfro wrote: »

The house was worth £165k in 2001. I still think £15k for 66% is a swindle. They were both already showing signs of dementia although neither were diagnosed until 2005 and 06. I think its terrible anyone is allowed to do this.

OK, even if the house was worth £165,000 in 2001, that was with Vacant Possession. With tenants in place with security of tenure, it was worth probably £80,000. As tenants, they would be rent free, I imagine, which would be worth another £700/month ie £8400/yr for 100% tenancy - ie about £5500/yr. 9 years of that is worth £50000. So overall, they got £65,000.

If they lived there rent free, then they got poor value, but they were far from totally swindled.