HOMEWISE

louisewhite60

Hi I am deprecating from my husband and we are selling our joint ownership house . I will have £250 left to buy a flat and have a cushion of money . Homewise offer 60+ nicer flats for less money . PLEASE can anyone advise me if they are a good company and if this is a good idea. 

louisewhite60

Sorry for the predictive text ? Seperation from my husband 

eddddy

Do you mean their Lifetime Leases?

Essentially, you would be buying a lease on a flat that lasts for the rest of your life.

• They would estimate how long they expect you to live. For example; if you're 65, they might estimate 25 years.

• So they'd charge you, say, £200k for a lease that they estimate will last 25 years

• You could say that paying £200k is like paying about 25 years of rent in advance

• When you die (after about 25 years), they will own the flat again (and they'll probably sell it, and they keep all the proceeds).

• So your heirs get nothing from the property

Obviously, instead, if you bought a (much smaller) flat for £200k in the normal way - in 25 years time, it might be worth a lot more, and you could leave it to your heirs.



In the last 25 years, average house prices have increased by over 100% - so assuming that continues - if you bought a flat today for £200k - it might be worth £400k in 25 years time. So you could leave £400k to your heirs.

But if you bought a lifetime lease today for £200k - in 25 years time there would be nothing to leave your heirs.

But lots of things might change in the next 25 years. And perhaps you don't want/need to leave anything when you die.

Former_MSE_Laura

Hi, a company has asked for a right of reply. MSE doesn't endorse anything a company says on the Forum:

'Reply from Homewise, in response to the post from ‘eddddy’, there are inaccuracies they would like to correct, so you have the right information to make an informed decision. 

Homewise provide a ‘Home for Life Plan’ which is an alternative option for people aged 60+ to secure their next home for less than the market price. You would pay a one-off sum to purchase a Lifetime Lease (the cost of which is always less than the full market value) on a property of your choice – it’s not just for flats, it can be any property (subject to certain criteria such as standard construction) anywhere in England or Wales, on the market with any estate agent. Homewise would purchase the property and you would own the Lifetime Lease to live there.

A Lifetime Lease is a legally binding agreement, registered at the Land Registry, which provides you with the right to live in your new home without any rent, mortgage or interest repayments for your lifetime. So, while you would not own the property itself, you would be secure in your chosen property for your lifetime and, if you wish to, can also safeguard a guaranteed inheritance for loved ones in the future.

 

The cost of the Lifetime Lease will depend on a range of factors, including age, but every ‘Home for Life Plan’ is bespoke and tailored to your needs, and you would have the option to protect and safeguard between 0%-50% of the property’s future value for your estate. If you choose to safeguard a percentage of the resale value then this would affect the cost of your Lifetime Lease at the start of the plan.

 

A rough guide may be that a person aged 65 with a current budget of £250,000 could be boosted up to a property worth £330,000 with 0% safeguarded, or boosted up to £286,000 with the maximum 50% safeguarded. So Homewise buys the property you want and you pay £250,000 for the Lifetime Lease to live there.

 

When the Home for Life Plan ends (either you pass away or move into full-time care) the property may or may not be sold, but any safeguarded percentage would be paid to your estate.'

eddddy

Hi Homewise

It's really great that you've taken the time to reply to my post. It would be great if other companies mentioned in the forums followed your lead and joined in the discussion.

You mention that there are inaccuracies in my post - but you don't mention what they are. As far as I can tell, you're not contradicting anything in my post - you're just adding some additional info.

I'm sure it would help others reading this thread if you were clearer about what you think was inaccurate.


I'll add a few comments 

• I think I've accurately described your "0% safeguarded" option. Your post appears to confirm my description - but you've added the additional info that you also have 1% to 50% safeguarded options. That's useful extra information.

• I mention buying a flat, because I was answering @lousewhite60's question about buying a flat. (You've added your sales-pitch about the range of properties you deal with - again, that's useful extra information.)

• I mentioned that you'd probably sell the property at the end of the lease - you say you might or might not. Why might you not sell it? Do you think it's inaccurate to say that you'd probably sell it?

• With the "0% safeguarded" option that I was describing, it's correct to say that you would keep the sale proceeds, isn't it?

• You mention the additional scenario of your tenant going into full-time care. I didn't mention that scenario (or many other scenarios) to keep my post reasonably brief. Unfortunately, posts don't tend to get read if they're too long. 

So I'm really not sure what you think was inaccurate in my post.

However, your rough guide figures are really, really interesting - thanks for sharing those. But I have to say that, in my opinion, those figures reinforce my opinion that a lifetime lease is very poor value from a purely financial perspective.  But perhaps others like the idea of a lifetime lease for non-financial reasons.

But as I say, it's really great that you've taken the time to join in the discussion.

Former_MSE_Laura

Hi, a company has asked for a right of reply. MSE doesn't endorse anything a company says on the Forum:

'Thank you for the reply eddddy and apologies for the delayed response on our behalf. We always welcome questions and are happy to discuss how a Lifetime Lease works, and the pros and cons at any time.

 

Due to Forum rules, we cannot give details here and our full response was not posted, however we would be more than happy to discuss your questions or concerns directly if you would like to contact us via our website.

 

To answer your question on the inaccuracies, this was regarding the perceived limitations of a Lifetime Lease and the inheritance options primarily. We are unable to fully detail how this works due to forum rules but there is information available on our website which describes the process further.

 

With regards to the end of the Home for Life Plan (when the Lifetime Lease Owner no longer resides in the property) the owner of the property (Homewise or it’s investors) will as you mention likely sell it on, or they may decide to keep their property for other use. Either way, the value of the property would be determined when the Lifetime Lease ends and any safeguarded percentage of that value would be paid to the estate. If someone has chosen not to safeguard any future value then yes the full value of the property would remain with the owner of the property.

 

Inheritance isn’t important to everyone and for many they choose to have the financial benefit of a greater boost upfront. This can mean they gift an early inheritance now, are able to personally benefit from living in the best property/location for them, or are able to create greater savings to enjoy their retirement with.

 

We purchase the property that our customer chooses to be their next home but, ultimately, buying a property is an investment for Homewise. No rent or payments are made at any time, and the return on this investment isn’t realised until the end of the Lifetime Lease – which is usually 20-30yrs in the future.

 

Hopefully this answers your questions regarding what happens when a Lifetime Lease comes to an end, but we’d be happy to talk through any personal circumstances and figures if you wish to speak with our team directly at any time.'

eddddy

MSE_Laura said:

To answer your question on the inaccuracies, this was regarding the perceived limitations of a Lifetime Lease and the inheritance options primarily. We are unable to fully detail how this works due to forum rules but there is information available on our website which describes the process further.

So just to be absolutely clear, you are still claiming that there were inaccuracies in my post (post number 3), but you still cannot specifically say what the inaccuracies are.


As far as I can tell, your replies seem to confirm that my post number 3 is a 100% accurate and correct example of your "0% safeguarded" offering.

So maybe others can draw their own conclusions.


I think the key difference between my post and yours is that I focussed on some cold hard financial numbers, whereas you tend to focus on the soft warm fuzzy marketing messages.

But that's absolutely fine. You're in the business of selling and marketing.

And perhaps it's interesting for readers of this thread to see how marketing messages can paint one type of picture, and actual numbers can paint a different type of picture.

70PC

If major repairs are needed, who picks up the bill?

lincroft1710

70PC said:

If major repairs are needed, who picks up the bill?

This thread is now 2 years old and probably no longer monitored by Homewisee. Would suggest you contact them or any other company you may consider buying from and ask them directly