Any suggestions on releasing equity from house?

Spiegelei

Hi all!

I had my house valued a couple of weeks ago by three estate agents and was told it was worth £1.2 million for a quick sale or £1.3 if I wasn't in a hurry. This gives me over £1.1 equity. I don't particularly want to move as it's been the family home for 40 years, so is there a way I can use some of that equity without my kids losing out too much one day? I'm 50.

AnotherJoe

My first suggestion is to use the advanced edit feature to alter your non descriptive title, to something more informative. How about "how to release equity from house " or something along those lines ?

Spiegelei

That'll teach me to be lazy - I knew I should have done that in the first place!

Thrugelmir

Why not downsize and release equity that way.

Spiegelei

I don't need to downsize and being in London, even for what this house is worth I'd only be swapping prices. Whilst moving is an option (although not one I want to do), I only know London because that's where I grew up. All holidays were spent in Europe visiting family so London is like an island to me - looks like I have some exploring to do!

amnblog

Such a broad question. You can, of course, turn some on the value of the property into cash provided you can service the lending (prove you can make the payments without difficulty).

Whether, you are in a position to service any lending, we don't know.

A lot depends on how much you wish to release and what you want it for.

Raised cash that is spent will by definition mean that your 'kids lose out'. Money that is invested in other property on the other hand, may see them benefit.

davidmcn

Spiegelei wrote: »

is there a way I can use some of that equity without my kids losing out too much one day?

Are your kids actually going to resent you spending your own money on yourself?

getmore4less

There is pending IHT issue. Could be £10k-£30k but potentially less as the new nil rate bands kick in

Will any of the kids want to keep the place

Creating debt against the house could reduce the IHT but that woul also need spending it or giving it away.

The issue with debt it need servicing.

Spiegelei

Thank you for your responses. I know it's a pretty broad question but I really have no idea what options there are other than selling it, which is probably the simplest one.

I'm medically retired so can't afford to lend but there's no resentment about me spending it - they encourage me to, I am just looking to see if I can benefit without the hassle of moving. I'm getting used to the idea the more I think about it, it's just a question of where...:eek:

AnotherJoe

You can look at equity release schemes, there are a variety but unless your life expectancy is low, then at your age odds are the interest roll up over the years will remove all the equity in the house.

There is also a scheme, name escapes me, where what the company does, in outline is help you buy a house by contributing to the cost, and then you can live in it until you die and then they get it.

Problem is at your age the deal you would get wont be that great. But my thought was, you sell for £1.3M and then buy a place for say £0.6M but costing you £0.5M (on this scheme) releasing £0.8M. (all numbers made up of course)

Or you could simply sell, buy for say £0.6M invest the £0.7M and kids get whatevers left of the £0.7M plus the new property.

You said this is the "family home" but it sounds as if only you live in it now, and will the kids have to sell it anyway to benefit from it? So unless you are wedded to living in it, maybe moving is a better plan? Is this the "ideal house" for you? If you weren't living there now, money aside, would you buy it? Would you prefer a different type of property / or location?

Thrugelmir

Spiegelei wrote: »

it's just a question of where...:eek:

With that amount of equity I'd move to Cornwall.