Equity release scam??

Mouse007

Your calculation misses that Barclays have been without interest for all those years. A huge risk for them to have taken.

For a house to have gone up in value from £110,000 to £420,000 suggests the equity release occurred sometime around 1988, using UK average on Nationwide House Price Index.

The bank base rate back then was over 12%, mortgage rates are usually about 2% above base. 30 years of interest at standard mortgage rates could easily be £172,000. Add back the original loan makes it nearly £200,000.

Yes they have won on the deal, but so have you with the other 75%. Sorry I don’t think you have a leg to stand on.

antrobus

Bitter1234 wrote: »

Back in the 80s/90s my grandparents released £27,500.00 from their mortgage....

Sometime between May and August 1998 apparently.
https://en.wikipedia.org/wiki/Shared_appreciation_mortgage

Bitter1234 wrote: »

...
Please please can someone help me and advise if I have a case to dispute this and where I go from here ?

You could join the Teacher Stern proposed class action.
https://www.thisismoney.co.uk/money/mortgageshome/article-6320105/Shared-appreciation-mortgage-scandal-set-court-borrowers-join-legal-action.html

Although the last such attempt crashed and burned.

Blackbeard_of_Perranporth

I hope they enjoyed the £27,000 back in the late 80s and obviously they were young enough to do so!

As a guide. My house was worth £48,000 in 1990. Today it is worth £325,000. If I had taken a share back then of £24,000 I would now owe £162,500!

dunstonh

The problem with this is that it is being viewed retrospectively with hindsight. However, at that time, it was a risk by the lender as no-one could predict the impact of the credit boom.

On the plus side, the house value went up greater than predicted and you are still getting a much higher figure than they would ever have dreamed of.

Thrugelmir

Bitter1234 wrote: »

Elderly people who need to downsize and maybe move to bungalows and flats because of health reasons are unable too , because the amount they have to repay to Barclays doesn’t leave them with enough money to buy their new property

Still a £160k of equity. Not an inconsiderable sum. Enough for a rental for quite a few years or an over 55's shared ownership property .

johncrosley

People shouldn’t take equity release full stop. Even if there is no-one to which you could leave your estate, circumstances can change and any future partners would be out of a home if you died first.

These bloodsuckers aren’t doing it for our benefit. With the interest compounded it is very unlikely that, when the time comes, there will be anything left of your estate no matter how little you released.

Whats_your_forte

johncrosley said:

People shouldn’t take equity release full stop. Even if there is no-one to which you could leave your estate, circumstances can change and any future partners would be out of a home if you died first.

These bloodsuckers aren’t doing it for our benefit. With the interest compounded it is very unlikely that, when the time comes, there will be anything left of your estate no matter how little you released.

Suggest you look into ER in a bit more detail rather than comparing to Shared Appreciation. Elderly couple, minimal income, unencumbered property of say £250k - Why would they not take their cash out in regular withdrawals to improve their standard of living?! 

Option would be to sell and rent (but with a large cash bank balance). Rental payments would cost more than a flexible drawdown!

Thrugelmir

johncrosley said:

People shouldn’t take equity release full stop. Even if there is no-one to which you could leave your estate, circumstances can change and any future partners would be out of a home if you died first.

These bloodsuckers aren’t doing it for our benefit. With the interest compounded it is very unlikely that, when the time comes, there will be anything left of your estate no matter how little you released.

If there was no demand for the products then they would be withdrawn. For some people it's the right thing. Everybody has the right to choose. 

SonOf

johncrosley said:

People shouldn’t take equity release full stop. Even if there is no-one to which you could leave your estate, circumstances can change and any future partners would be out of a home if you died first.

These bloodsuckers aren’t doing it for our benefit. With the interest compounded it is very unlikely that, when the time comes, there will be anything left of your estate no matter how little you released.

Your understanding of modern equity release products is completely wrong.  I suggest you learn about it first and then post comments.

csgohan4

Elderly doesn't mean they have no idea what their doing. Quite clear ER has a place for some, need some money, use their house as leverage, simples...

People seem to think inheritance is expected, but it's not, their parents can do what ever they want with it. Leaving money is a choice not an absolute,