Homewise life time lease plan for over 60’s

piedpipers

You find a new home and they'll discount the price by 40%?

Oh right, what they mean is you pay for most of the house but they own it outright.

Why aren’t they regulated by the FSA? My mum’s solicitor said the plan isn’t in her interest but could see why Homewise liked it.

Homewise pays around 30% to 40% for 100% ownership of a new property. They let you live in it and you pay the cost of maintaining the property until you die or go into a Nursing Home! The price the customer paid with property appreciation is sickening when you think they're profiting from the sum total of someone’s life.


My mum would have paid nearly 70% of the house price just to get a lifetime lease! Homewise sells a product that’ll strip you out of your own property and put you in one to borrow and maintain for them.

I think this is another greedy company preying on the old and gullible. Surely this should be against the law?

moneyistooshorttomention

Actually I don't think its a bad idea for some people. It all depends on their circumstances. It could mean the difference between living in a small house/flat in a bad area or in a decent house in a decent area. If that were the case - then the OAP concerned would be best to do that. If that were the only way to live somewhere decent, then I certainly would personally (even though I would no longer own the house the day I died - and therefore couldn't leave it to whoever/whatever I wanted to). To me - that would be a price worth paying to ensure that, whilst I was alive, I was housed in that decent house/decent area.

To other OAP's it might mean the only chance they had to escape from rented housing and get a house of their own (again...same thing...they wouldnt be able to leave their house to someone of their choice - but at least they would have had their "own home" whilst alive).

To me - it's a business deal that could suit both parties and the only person it wouldn't suit is someone who had been hoping to inherit the house when their parent died and found that they couldnt (ie because the parent no longer owned their own home).

As for maintenance - unless there is a way this firm could enforce maintenance being done "to their standard" (and I couldnt see how they could - because it would be the persons own home still whilst alive) then the house could fall to "rack and ruin" and the firm find they inherited a wreck when the owner died. So the firm might actually have to spend money bringing the house up to scratch before they could sell it - at the very least they might want to deal with the fact that the house would probably be unmodernised/"old person style" by the time the owner died.

Linton

piedpipers wrote: »

You find a new home and they'll discount the price by 40%?

Oh right, what they mean is you pay for most of the house but they own it outright.

Why aren’t they regulated by the FSA? My mum’s solicitor said the plan isn’t in her interest but could see why Homewise liked it.

Homewise pays around 30% to 40% for 100% ownership of a new property. They let you live in it and you pay the cost of maintaining the property until you die or go into a Nursing Home! The price the customer paid with property appreciation is sickening when you think they're profiting from the sum total of someone’s life.


My mum would have paid nearly 70% of the house price just to get a lifetime lease! Homewise sells a product that’ll strip you out of your own property and put you in one to borrow and maintain for them.

I think this is another greedy company preying on the old and gullible. Surely this should be against the law?

Something like this would seem to be a good idea for people in a similar position to us and I will definitely consider it. We have no children so inheritance isnt a major concern. We would like to spend our declining years in the best possible house we can get, but do not want leave this world with unused equity. If someone else will supplement what we can afford by 60%-80% I have no problems with them getting the whole house after we have gone. Also makes the executor's job easier.

piedpipers

Linton you said they could increase your buying power by 60% -80%! At least read the post before commenting, it's around 30%. It's not buying power because you're not actually buying the property.
Homewise should be regulated and isn't because of a loophole in the law, when Homewise move you it is not seen as equity release when it clearly is.
An Independant Financial Advisor couldn't sell this as there are better products. An estate agent can as they aren't accountable in the same way.
No one should consider this product until they've consulted an Independant Financial Advisor.

Linton

piedpipers wrote: »

Linton you said they could increase your buying power by 60% -80%! At least read the post before commenting, it's around 30%.
Homewise should be regulated and isn't because of a loophole in the law, when Homewise move you it is not seen as equity release when it clearly is.
An Independant Financial Advisor couldn't sell this as there are better products. An estate agent can as they aren't accountable in the same way.
No one should consider this product until they've consulted an Independant Financial Advisor.

Suggest you try a bit of arithmetic. I will be significantly older than Mum if/when I want to move to a very comfortable house in an expensive part of the country so will get a better deal. If they pay 40%, I am paying 60%. So for me that is an uplift of 66% more to buy a house than I could otherwise afford. 66% extra means a much better house.

Equity release is not sold to meet the same need - I dont want to release equity in an existing house. I want someone to pay for me to buy a new house. And if it means them gaining the house after I have no need for it, fine by me. Of course I will consult the appropriate advisors and go for the best deal that achieves the same objective.

lessonlearned

piedpipers wrote: »

Y! The price the customer paid with property appreciation is sickening when you think they're profiting from the sum total of someone’s life.


I think this is another greedy company preying on the old and gullible. Surely this should be against the law?

I think you have either misunderstood or as someone else on this thread has suggested - perhaps you are thinking of your inheritance.

There is no scam that I can see. It's a straightforward business arrangement, similar to any other part buy/part lease.

It offers an opportunity for someone to upgrade to a better property in a nicer area than they might otherwise be unable to afford to buy at 100% ownership.

It is a far better option than buying something cheaper in a poor area with all the attendant risks faced by an elderly female who lives alone and much better than renting privately in a good area which is the only other option.

Renting privately is fine but there is no security of tenure and your mother could find herself having to move several times, possibly at a time of life when she is ill-equipped or dis-inclined to want to move again.

The lifetime lease option is a good half way house measure. Somewhere nice to live at a price you can afford and with secure tenure.

The downside is of course that there is nothing left for relatives to inherit so it wouldn't suit everyone.

If it were my parents - I would encourage them to spend the lot and have a comfortable and secure old age.

noddynoo

They are con artists and as for Arun estates the estate agency chain who conceived this idea they are the biggest crooks and liars in Sussex! Avoid like the plague esp Cubitt and West in Brighton

piedpipers

Honestly, anyone who looked at the scheme and says it's good is seriously defective, my mums solicitor, an Independant Financial Advisor, our mp is even taking the case to DTI.

On her quote:

Parents die after 25 years Homewise make £500,000
Aviva no payment mortgage cost £245,000. Based on Halifax House Prices there would be £255,000 over!

Maybe if you think the scheme is good is the reason you're skint for retirement? And if covered by FSA they may not stay in business long.

ILW

Depends who you mean the scheme to be good for.

Linton

piedpipers wrote: »

Honestly, anyone who looked at the scheme and says it's good is seriously defective, my mums solicitor, an Independant Financial Advisor, our mp is even taking the case to DTI.

On her quote:

Parents die after 25 years Homewise make £500,000
Aviva no payment mortgage cost £245,000. Based on Halifax House Prices there would be £255,000 over!

Maybe if you think the scheme is good is the reason you're skint for retirement?

You havent understood. What use is £255000 over if you are dead? Why should you want want anything over? I have just run the Aviva no payment mortgage calculator for a £500K house. The maximum they will lend is £145000 if the younger of the couple is 65, which is about 30%. I guess that from your figures Homewise would pay more. That is the key criterion: who will pay the most money.

You seem fixated on being skint and wanting to leave money to the kids, perhaps because you are a kid. These sorts of products seem particularly useful for those of us who are very far from being skint but want to ensure that they use as much of their wealth as possible before they pop off rather than leaving it stuck in an expensive pile of bricks.

lessonlearned

We will have to agree to differ on this one.

I am in total agreement with ILW - for the purchaser who even when they die and leave nothing then it can be a very good deal.

For relatives who wish to inherit then it's a bum deal.

It all depends on your viewpoint.