Mis-selling...how about mis-buying!

wingerdot

My neighbour and his wife are both in their late 80s and have a bungalow on the sea-front worth about £275K. About 13 years ago, they sold out to an equity purchase company and were given a lump sum of only £12K, receive a payment of about £2.5K per year until they die or leave and still retain 18% of the value of the property. This seems a very poor deal to me and it made me wonder if there have been any cases of this "product" being mis-sold and if so, whether there is any recourse with these companies.

MacMickster

What is your interest in this?

I suspect that only a solicitor (or possibly Age UK) could advise on this with sight of the full agreement and details of the valuation of the property at the time of the agreement.

If you are merely a concerned neighbour, and the couple themselves are OK with their deal then I would definitely let sleeping dogs lie. In their late 80s they could probably do without a legal dispute even if there is a valid case (but there may not be), and the blow to their self-esteem of both themselves and others thinking that they have been taken for a ride may impact on the quality of their remaining lives.

"Blissful Ignorance" may, sadly, be the best option.

wingerdot

I have no interest in this and, as you say, its probably better to leave it alone but I get very upset when I hear of people using methods of selling to "con" old people. We will all be old and maybe, vulnerable one day (I hope/hope not-delete where applicable) and I would hate things like that done to me. Like the "gas man" who sold the previous owner of our house (a widow in her 80s) a £3K boiler to power the heating in a small 2 bedroom bungalow. We have now converted it into a large 4 bed house and there is still spare capacity for heating and hot water.
How do these people sleep at night.

JQ.

Are you sure it's that bad?

13 years ago the house could have been worth £125,000. If one of them lives to 90 - not unrealistic, then they have an income of £70,000 over the period for which they gave away circa £100k of value. That does not sound too shady to me on the basis that the investor was potentially tieing up there money for the next 30 years. The reason it looks bad now is because house prices have trippled in some areas and in reality the current recession has not burst the bubble. If we'd all known house prices were due to tripple 10 years ago I'm sure we'd have all invested like mad in property, but hindsight is a great thing.

dopester

JQ. wrote: »

If we'd all known house prices were due to tripple 10 years ago I'm sure we'd have all invested like mad in property, but hindsight is a great thing.

13 years ago the OP says.

It's bad enough hearing the whinge of the people who took out Shared Appreciation Mortgages in the trough of the market around 1998.

http://www.guardian.co.uk/money/2008/sep/30/mortgages.consumeraffairs