Equity Release Alternatives?

Julezy101

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Wow I didn't expect this much debate!

Just to put some more context into my situation - I'm not in position yet to make a decision on this and am hopefully many years off it, I just wanted to get a range of other options as it was a topic that I've had an interest in and what other people would do. 

As I've got older I now like to consider things based on whether they represent 'value' or not with an aim to maximise value.
Based on this (to me) ER doesn't seem good value - just my opinion.

I dont have an expensive lifestyle and should have enough to have a comfortable retirement (SIPP, ISA, 2 small work pensions and the SP) but I would like to get the most 'value' out of a large asset that I've spent many years paying for i.e my house. This would make retirement even more comfortable.

I think straight out private renting is a no no but the assisted living is quite appealing which I'd not thought of. Downsizing is a possibility but again unless you are leaving the property to someone / charity is that really the best value. Also the possibility of a lower standard of living than what your used to. I think I can see myself living outside the UK in my later years - somewhere warmer - UK winters are too miserable and if you dont have to endure them why would you. 

So far here's the options

1. Sell house - rent / assisted living with the capital from house sale until it runs out / die (with all caveats)
2. ER 
3. Stay in house - gift to charities / friends
4. Downsizing - release some capital, leave house to charities / friends.

I feel  it would help if you thought through what you mean by "Most Value".  It seems to me that this can only be ascertained in the context of what you want to do. Perhaps "Most Value" could be just continuing to live in your current home with enough money to finance the standard of living you are used to possibly with changes made to the house to make it more comforable. On the other hand it could be releasing as much money as possible whilst you are alive to pay for travel, a more comforable life style or whatever.

If you can explain and cost what you want to achieve we could suggest the most efficient way to get the required money from your house. Needing £300K is very different to needing £20K. If there is no benefit you really want that you cannot already afford I cant see any point in worrying about getting Most Value.

It is very thought provoking and I assume my thoughts will change as I get older (currently 54 nearly) - 'value' is difficult to quantify, what is value for someone may not be for someone else. At my age I want to maximise the value of my house in my lifetime - in 20 years I might not care at all and will be happy to live in a similar value property (all be it somewhere warmer) and lose the value of it. Interesting debate.

The best and least stressful way to maximise the value of your house if you are not concerned about spending the money could well be to simply keep it and rely on long term inflation in house prices especially if it is a desirable house in a desirable location..

Oh i definitely want to spend some of the 300k - of that there is no doubt, its just a case of how much 

Linton

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Wow I didn't expect this much debate!

Just to put some more context into my situation - I'm not in position yet to make a decision on this and am hopefully many years off it, I just wanted to get a range of other options as it was a topic that I've had an interest in and what other people would do. 

As I've got older I now like to consider things based on whether they represent 'value' or not with an aim to maximise value.
Based on this (to me) ER doesn't seem good value - just my opinion.

I dont have an expensive lifestyle and should have enough to have a comfortable retirement (SIPP, ISA, 2 small work pensions and the SP) but I would like to get the most 'value' out of a large asset that I've spent many years paying for i.e my house. This would make retirement even more comfortable.

I think straight out private renting is a no no but the assisted living is quite appealing which I'd not thought of. Downsizing is a possibility but again unless you are leaving the property to someone / charity is that really the best value. Also the possibility of a lower standard of living than what your used to. I think I can see myself living outside the UK in my later years - somewhere warmer - UK winters are too miserable and if you dont have to endure them why would you. 

So far here's the options

1. Sell house - rent / assisted living with the capital from house sale until it runs out / die (with all caveats)
2. ER 
3. Stay in house - gift to charities / friends
4. Downsizing - release some capital, leave house to charities / friends.

I feel  it would help if you thought through what you mean by "Most Value".  It seems to me that this can only be ascertained in the context of what you want to do. Perhaps "Most Value" could be just continuing to live in your current home with enough money to finance the standard of living you are used to possibly with changes made to the house to make it more comforable. On the other hand it could be releasing as much money as possible whilst you are alive to pay for travel, a more comforable life style or whatever.

If you can explain and cost what you want to achieve we could suggest the most efficient way to get the required money from your house. Needing £300K is very different to needing £20K. If there is no benefit you really want that you cannot already afford I cant see any point in worrying about getting Most Value.

It is very thought provoking and I assume my thoughts will change as I get older (currently 54 nearly) - 'value' is difficult to quantify, what is value for someone may not be for someone else. At my age I want to maximise the value of my house in my lifetime - in 20 years I might not care at all and will be happy to live in a similar value property (all be it somewhere warmer) and lose the value of it. Interesting debate.

The best and least stressful way to maximise the value of your house if you are not concerned about spending the money could well be to simply keep it and rely on long term inflation in house prices especially if it is a desirable house in a desirable location..

Oh i definitely want to spend some of the 300k - of that there is no doubt, its just a case of how much 

I suggest you determine why, how much and when you want to spend the money.  Only then can you work out how to ensure the money is available when you want it.  The objectives of course could change in the futuire but you reaslly need something to start with.

Julezy101

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Wow I didn't expect this much debate!

Just to put some more context into my situation - I'm not in position yet to make a decision on this and am hopefully many years off it, I just wanted to get a range of other options as it was a topic that I've had an interest in and what other people would do. 

As I've got older I now like to consider things based on whether they represent 'value' or not with an aim to maximise value.
Based on this (to me) ER doesn't seem good value - just my opinion.

I dont have an expensive lifestyle and should have enough to have a comfortable retirement (SIPP, ISA, 2 small work pensions and the SP) but I would like to get the most 'value' out of a large asset that I've spent many years paying for i.e my house. This would make retirement even more comfortable.

I think straight out private renting is a no no but the assisted living is quite appealing which I'd not thought of. Downsizing is a possibility but again unless you are leaving the property to someone / charity is that really the best value. Also the possibility of a lower standard of living than what your used to. I think I can see myself living outside the UK in my later years - somewhere warmer - UK winters are too miserable and if you dont have to endure them why would you. 

So far here's the options

1. Sell house - rent / assisted living with the capital from house sale until it runs out / die (with all caveats)
2. ER 
3. Stay in house - gift to charities / friends
4. Downsizing - release some capital, leave house to charities / friends.

I feel  it would help if you thought through what you mean by "Most Value".  It seems to me that this can only be ascertained in the context of what you want to do. Perhaps "Most Value" could be just continuing to live in your current home with enough money to finance the standard of living you are used to possibly with changes made to the house to make it more comforable. On the other hand it could be releasing as much money as possible whilst you are alive to pay for travel, a more comforable life style or whatever.

If you can explain and cost what you want to achieve we could suggest the most efficient way to get the required money from your house. Needing £300K is very different to needing £20K. If there is no benefit you really want that you cannot already afford I cant see any point in worrying about getting Most Value.

It is very thought provoking and I assume my thoughts will change as I get older (currently 54 nearly) - 'value' is difficult to quantify, what is value for someone may not be for someone else. At my age I want to maximise the value of my house in my lifetime - in 20 years I might not care at all and will be happy to live in a similar value property (all be it somewhere warmer) and lose the value of it. Interesting debate.

The best and least stressful way to maximise the value of your house if you are not concerned about spending the money could well be to simply keep it and rely on long term inflation in house prices especially if it is a desirable house in a desirable location..

Oh i definitely want to spend some of the 300k - of that there is no doubt, its just a case of how much 

I suggest you determine why, how much and when you want to spend the money.  Only then can you work out how to ensure the money is available when you want it.  The objectives of course could change in the futuire but you reaslly need something to start with.

Ok the 'why' is easy, because I've paid into it for years so I own it and want some 'value' from it.
How much? - back of a fag packet, £200k
When I want the money? - not so easy to answer -  back of a fag packet again, 70+?

lisyloo

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Wow I didn't expect this much debate!

Just to put some more context into my situation - I'm not in position yet to make a decision on this and am hopefully many years off it, I just wanted to get a range of other options as it was a topic that I've had an interest in and what other people would do. 

As I've got older I now like to consider things based on whether they represent 'value' or not with an aim to maximise value.
Based on this (to me) ER doesn't seem good value - just my opinion.

I dont have an expensive lifestyle and should have enough to have a comfortable retirement (SIPP, ISA, 2 small work pensions and the SP) but I would like to get the most 'value' out of a large asset that I've spent many years paying for i.e my house. This would make retirement even more comfortable.

I think straight out private renting is a no no but the assisted living is quite appealing which I'd not thought of. Downsizing is a possibility but again unless you are leaving the property to someone / charity is that really the best value. Also the possibility of a lower standard of living than what your used to. I think I can see myself living outside the UK in my later years - somewhere warmer - UK winters are too miserable and if you dont have to endure them why would you. 

So far here's the options

1. Sell house - rent / assisted living with the capital from house sale until it runs out / die (with all caveats)
2. ER 
3. Stay in house - gift to charities / friends
4. Downsizing - release some capital, leave house to charities / friends.

I feel  it would help if you thought through what you mean by "Most Value".  It seems to me that this can only be ascertained in the context of what you want to do. Perhaps "Most Value" could be just continuing to live in your current home with enough money to finance the standard of living you are used to possibly with changes made to the house to make it more comforable. On the other hand it could be releasing as much money as possible whilst you are alive to pay for travel, a more comforable life style or whatever.

If you can explain and cost what you want to achieve we could suggest the most efficient way to get the required money from your house. Needing £300K is very different to needing £20K. If there is no benefit you really want that you cannot already afford I cant see any point in worrying about getting Most Value.

It is very thought provoking and I assume my thoughts will change as I get older (currently 54 nearly) - 'value' is difficult to quantify, what is value for someone may not be for someone else. At my age I want to maximise the value of my house in my lifetime - in 20 years I might not care at all and will be happy to live in a similar value property (all be it somewhere warmer) and lose the value of it. Interesting debate.

The best and least stressful way to maximise the value of your house if you are not concerned about spending the money could well be to simply keep it and rely on long term inflation in house prices especially if it is a desirable house in a desirable location..

Oh i definitely want to spend some of the 300k - of that there is no doubt, its just a case of how much 

I suggest you determine why, how much and when you want to spend the money.  Only then can you work out how to ensure the money is available when you want it.  The objectives of course could change in the futuire but you reaslly need something to start with.

Ok the 'why' is easy, because I've paid into it for years so I own it and want some 'value' from it.
How much? - back of a fag packet, £200k
When I want the money? - not so easy to answer -  back of a fag packet again, 70+?

But you get the value from it by living in it and not paying rent.
I’m not trying to be harsh and perhaps I’m misunderstanding but you appear to be saying that you want to live in it (rent free), have access to the money, but also don’t want to pay an equity release company for the privilege (with no actual detail on why you think that’s poor value).
not trying to be harsh but can’t see how all that is compatible.
equity release sounds like a good idea in your situation (If you want to keep your current home), you just need to find a decent scheme and not go into it too young.

lisyloo

thriftytracey said:

The problem is that suitable downsizing properties are just not being built.  On a recent development locally of 100 houses just two bungalows were built.  Bungalows generally are snapped up and we have discovered that they go for the same price as our large house and garden.  There would hardly be any equity released, probably just enough to pay stamp duty and solicitor, estate agent and moving costs.  Some two bedroomed bungalows we have looked at are going for more than our property would fetch.  Not only that many of them need substantial work.  It is very depressing.  

A friend has been trying to sell her father's assisted living flat for 12 months as he is in a residential care home.  It was marketed at £25k less that the original purchase price in order to sell.  She finally found a buyer, conveyancing has taken 4 months so far and now her father has died so it now has to go through probate.  Her buyer has withdrawn as he has lost his buyer and now has health issues.  During this whole period she has had to continue to pay £600 a month service charge.  All the estate agents she contacted said assisted living apartments just do not sell.  She has to give a proportion of the "sale price or market value" whichever is the highest to the assisted living facility.  She has contacted one of these companies who buy properties (they bought her father's bungalow so he could quickly move to the assisted living facility) and they said "I know it is insulting but we can only offer £30 - £40k for it because they are hard to sell and having to continue to pay the service charge".  She is now thinking of auction and they are suggesting a low reserve price.

Also, some of these assisted living facilities, particular those run by housing associations are very badly insulated.  There are many complaints from tenants of a well known HA near me of damp and condensation.

I find it a bit contradictory when people say there is no stock but also existing ones can’t be sold.
what I think has happened is there have been a lot of new ones built e.g. MacArthury and stone, which are made very attractive (for a fee) in terms of what’s on offer plus an effective marketing machine behind it.
the traditional ones (that have more reasonable fees) and then less attractive and can’t sell.

our parents had a more traditional one and yes it’s not completely free of issues (they had a lift break down over the Christmas holiday and MIL was very unhappy) and there are costs if someone else is looking after the garden and maintaining the communal lounge, but it was a good solution for them and they had lots of company.

they did lol at equity release and were offered £250 for 75% of their property at age 74.
what was a dealbreaker was the clauses to internally decorate every 5 years.
we understand they don’t want the place to go to rack and ruin but we felt this was ridiculous for elderly disabled people. I’ve not decorated my own house in 20 years and it’s a bit dated but nowt wrong with it.

you can pick holes in everything, but it had many benefits for them especially on the company side.
when the lift broke the manager also made sure people had milk and medication so there was that too.

yes there are fees for communal maintenance but you get the benefits of not having to that. When you are unable to do it on your freehold property then you’ll have to pay someone to do the gardening and possibly cleaning too except on a larger property.

Julezy101

lisyloo said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Wow I didn't expect this much debate!

Just to put some more context into my situation - I'm not in position yet to make a decision on this and am hopefully many years off it, I just wanted to get a range of other options as it was a topic that I've had an interest in and what other people would do. 

As I've got older I now like to consider things based on whether they represent 'value' or not with an aim to maximise value.
Based on this (to me) ER doesn't seem good value - just my opinion.

I dont have an expensive lifestyle and should have enough to have a comfortable retirement (SIPP, ISA, 2 small work pensions and the SP) but I would like to get the most 'value' out of a large asset that I've spent many years paying for i.e my house. This would make retirement even more comfortable.

I think straight out private renting is a no no but the assisted living is quite appealing which I'd not thought of. Downsizing is a possibility but again unless you are leaving the property to someone / charity is that really the best value. Also the possibility of a lower standard of living than what your used to. I think I can see myself living outside the UK in my later years - somewhere warmer - UK winters are too miserable and if you dont have to endure them why would you. 

So far here's the options

1. Sell house - rent / assisted living with the capital from house sale until it runs out / die (with all caveats)
2. ER 
3. Stay in house - gift to charities / friends
4. Downsizing - release some capital, leave house to charities / friends.

I feel  it would help if you thought through what you mean by "Most Value".  It seems to me that this can only be ascertained in the context of what you want to do. Perhaps "Most Value" could be just continuing to live in your current home with enough money to finance the standard of living you are used to possibly with changes made to the house to make it more comforable. On the other hand it could be releasing as much money as possible whilst you are alive to pay for travel, a more comforable life style or whatever.

If you can explain and cost what you want to achieve we could suggest the most efficient way to get the required money from your house. Needing £300K is very different to needing £20K. If there is no benefit you really want that you cannot already afford I cant see any point in worrying about getting Most Value.

It is very thought provoking and I assume my thoughts will change as I get older (currently 54 nearly) - 'value' is difficult to quantify, what is value for someone may not be for someone else. At my age I want to maximise the value of my house in my lifetime - in 20 years I might not care at all and will be happy to live in a similar value property (all be it somewhere warmer) and lose the value of it. Interesting debate.

The best and least stressful way to maximise the value of your house if you are not concerned about spending the money could well be to simply keep it and rely on long term inflation in house prices especially if it is a desirable house in a desirable location..

Oh i definitely want to spend some of the 300k - of that there is no doubt, its just a case of how much 

I suggest you determine why, how much and when you want to spend the money.  Only then can you work out how to ensure the money is available when you want it.  The objectives of course could change in the futuire but you reaslly need something to start with.

Ok the 'why' is easy, because I've paid into it for years so I own it and want some 'value' from it.
How much? - back of a fag packet, £200k
When I want the money? - not so easy to answer -  back of a fag packet again, 70+?

But you get the value from it by living in it and not paying rent.
I’m not trying to be harsh and perhaps I’m misunderstanding but you appear to be saying that you want to live in it (rent free), have access to the money, but also don’t want to pay an equity release company for the privilege (with no actual detail on why you think that’s poor value).
not trying to be harsh but can’t see how all that is compatible.
equity release sounds like a good idea in your situation (If you want to keep your current home), you just need to find a decent shame and not go into it too young.

Yes but the 'value' has been earnt by paying for it over the years to own it outright to be in a situation of not paying rent / mortgage.
At the end of the day I am beginning to realise that if you own you own home and have no dependants to pass it onto then there really is now way to extract 'value' from it - maybe that it what I need to come to terms with.

Pat38493

Julezy101 said:

lisyloo said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Wow I didn't expect this much debate!

Just to put some more context into my situation - I'm not in position yet to make a decision on this and am hopefully many years off it, I just wanted to get a range of other options as it was a topic that I've had an interest in and what other people would do. 

As I've got older I now like to consider things based on whether they represent 'value' or not with an aim to maximise value.
Based on this (to me) ER doesn't seem good value - just my opinion.

I dont have an expensive lifestyle and should have enough to have a comfortable retirement (SIPP, ISA, 2 small work pensions and the SP) but I would like to get the most 'value' out of a large asset that I've spent many years paying for i.e my house. This would make retirement even more comfortable.

I think straight out private renting is a no no but the assisted living is quite appealing which I'd not thought of. Downsizing is a possibility but again unless you are leaving the property to someone / charity is that really the best value. Also the possibility of a lower standard of living than what your used to. I think I can see myself living outside the UK in my later years - somewhere warmer - UK winters are too miserable and if you dont have to endure them why would you. 

So far here's the options

1. Sell house - rent / assisted living with the capital from house sale until it runs out / die (with all caveats)
2. ER 
3. Stay in house - gift to charities / friends
4. Downsizing - release some capital, leave house to charities / friends.

I feel  it would help if you thought through what you mean by "Most Value".  It seems to me that this can only be ascertained in the context of what you want to do. Perhaps "Most Value" could be just continuing to live in your current home with enough money to finance the standard of living you are used to possibly with changes made to the house to make it more comforable. On the other hand it could be releasing as much money as possible whilst you are alive to pay for travel, a more comforable life style or whatever.

If you can explain and cost what you want to achieve we could suggest the most efficient way to get the required money from your house. Needing £300K is very different to needing £20K. If there is no benefit you really want that you cannot already afford I cant see any point in worrying about getting Most Value.

It is very thought provoking and I assume my thoughts will change as I get older (currently 54 nearly) - 'value' is difficult to quantify, what is value for someone may not be for someone else. At my age I want to maximise the value of my house in my lifetime - in 20 years I might not care at all and will be happy to live in a similar value property (all be it somewhere warmer) and lose the value of it. Interesting debate.

The best and least stressful way to maximise the value of your house if you are not concerned about spending the money could well be to simply keep it and rely on long term inflation in house prices especially if it is a desirable house in a desirable location..

Oh i definitely want to spend some of the 300k - of that there is no doubt, its just a case of how much 

I suggest you determine why, how much and when you want to spend the money.  Only then can you work out how to ensure the money is available when you want it.  The objectives of course could change in the futuire but you reaslly need something to start with.

Ok the 'why' is easy, because I've paid into it for years so I own it and want some 'value' from it.
How much? - back of a fag packet, £200k
When I want the money? - not so easy to answer -  back of a fag packet again, 70+?

But you get the value from it by living in it and not paying rent.
I’m not trying to be harsh and perhaps I’m misunderstanding but you appear to be saying that you want to live in it (rent free), have access to the money, but also don’t want to pay an equity release company for the privilege (with no actual detail on why you think that’s poor value).
not trying to be harsh but can’t see how all that is compatible.
equity release sounds like a good idea in your situation (If you want to keep your current home), you just need to find a decent shame and not go into it too young.

Yes but the 'value' has been earnt by paying for it over the years to own it outright to be in a situation of not paying rent / mortgage.
At the end of the day I am beginning to realise that if you own you own home and have no dependants to pass it onto then there really is now way to extract 'value' from it - maybe that it what I need to come to terms with.

Well you have been given various options for how to release at least some of the money.

I have also seen houses advertised on the internet where it says something like you are buying this house but someone has the right to live in it until they die - I am not sure what those arrangements are about or what the occupier got out of it.

I am not sure if you have posted anything about your other retirement financial provisions previously - for example if you have some amount of guaranteed retirement income, then your original proposal to rent somewhere or go to some kind of retirement apparements or suchlike might be fine.  This is in the end the only way you are going to release the entire equity of your home for you to spend in your lifetime.

If you do equity release, you are effectively taking out a mortgage on your property and the company that gives you the money has to finance that cash from somewhere, given that you are still in the house.  If you are asking them to let you life in the house indefinitely until the end of your life, they will obviously price that risk accordingly.  However as has been pointed out to you, if you happen to be unfortunate and die much earlier, there will still be equity in the house which will go into your estate.

As I’ve said our strategy is to downsize, and then maybe even downsize again when we get really old.  We can still survive without doing that but not with the same level of lifestyle.  Also we have children so if we are lucky and don’t need to go into care homes or suchlike we would be able to leave something for them.

Linton

Julezy101 said:

lisyloo said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Wow I didn't expect this much debate!

Just to put some more context into my situation - I'm not in position yet to make a decision on this and am hopefully many years off it, I just wanted to get a range of other options as it was a topic that I've had an interest in and what other people would do. 

As I've got older I now like to consider things based on whether they represent 'value' or not with an aim to maximise value.
Based on this (to me) ER doesn't seem good value - just my opinion.

I dont have an expensive lifestyle and should have enough to have a comfortable retirement (SIPP, ISA, 2 small work pensions and the SP) but I would like to get the most 'value' out of a large asset that I've spent many years paying for i.e my house. This would make retirement even more comfortable.

I think straight out private renting is a no no but the assisted living is quite appealing which I'd not thought of. Downsizing is a possibility but again unless you are leaving the property to someone / charity is that really the best value. Also the possibility of a lower standard of living than what your used to. I think I can see myself living outside the UK in my later years - somewhere warmer - UK winters are too miserable and if you dont have to endure them why would you. 

So far here's the options

1. Sell house - rent / assisted living with the capital from house sale until it runs out / die (with all caveats)
2. ER 
3. Stay in house - gift to charities / friends
4. Downsizing - release some capital, leave house to charities / friends.

I feel  it would help if you thought through what you mean by "Most Value".  It seems to me that this can only be ascertained in the context of what you want to do. Perhaps "Most Value" could be just continuing to live in your current home with enough money to finance the standard of living you are used to possibly with changes made to the house to make it more comforable. On the other hand it could be releasing as much money as possible whilst you are alive to pay for travel, a more comforable life style or whatever.

If you can explain and cost what you want to achieve we could suggest the most efficient way to get the required money from your house. Needing £300K is very different to needing £20K. If there is no benefit you really want that you cannot already afford I cant see any point in worrying about getting Most Value.

It is very thought provoking and I assume my thoughts will change as I get older (currently 54 nearly) - 'value' is difficult to quantify, what is value for someone may not be for someone else. At my age I want to maximise the value of my house in my lifetime - in 20 years I might not care at all and will be happy to live in a similar value property (all be it somewhere warmer) and lose the value of it. Interesting debate.

The best and least stressful way to maximise the value of your house if you are not concerned about spending the money could well be to simply keep it and rely on long term inflation in house prices especially if it is a desirable house in a desirable location..

Oh i definitely want to spend some of the 300k - of that there is no doubt, its just a case of how much 

I suggest you determine why, how much and when you want to spend the money.  Only then can you work out how to ensure the money is available when you want it.  The objectives of course could change in the futuire but you reaslly need something to start with.

Ok the 'why' is easy, because I've paid into it for years so I own it and want some 'value' from it.
How much? - back of a fag packet, £200k
When I want the money? - not so easy to answer -  back of a fag packet again, 70+?

But you get the value from it by living in it and not paying rent.
I’m not trying to be harsh and perhaps I’m misunderstanding but you appear to be saying that you want to live in it (rent free), have access to the money, but also don’t want to pay an equity release company for the privilege (with no actual detail on why you think that’s poor value).
not trying to be harsh but can’t see how all that is compatible.
equity release sounds like a good idea in your situation (If you want to keep your current home), you just need to find a decent shame and not go into it too young.

Yes but the 'value' has been earnt by paying for it over the years to own it outright to be in a situation of not paying rent / mortgage.
At the end of the day I am beginning to realise that if you own you own home and have no dependants to pass it onto then there really is now way to extract 'value' from it - maybe that it what I need to come to terms with.

Surely extracting wealth from your house by ER when you are 70 is more value than extracting nothing,

lisyloo

Julezy101 said:

lisyloo said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Linton said:

Julezy101 said:

Wow I didn't expect this much debate!

Just to put some more context into my situation - I'm not in position yet to make a decision on this and am hopefully many years off it, I just wanted to get a range of other options as it was a topic that I've had an interest in and what other people would do. 

As I've got older I now like to consider things based on whether they represent 'value' or not with an aim to maximise value.
Based on this (to me) ER doesn't seem good value - just my opinion.

I dont have an expensive lifestyle and should have enough to have a comfortable retirement (SIPP, ISA, 2 small work pensions and the SP) but I would like to get the most 'value' out of a large asset that I've spent many years paying for i.e my house. This would make retirement even more comfortable.

I think straight out private renting is a no no but the assisted living is quite appealing which I'd not thought of. Downsizing is a possibility but again unless you are leaving the property to someone / charity is that really the best value. Also the possibility of a lower standard of living than what your used to. I think I can see myself living outside the UK in my later years - somewhere warmer - UK winters are too miserable and if you dont have to endure them why would you. 

So far here's the options

1. Sell house - rent / assisted living with the capital from house sale until it runs out / die (with all caveats)
2. ER 
3. Stay in house - gift to charities / friends
4. Downsizing - release some capital, leave house to charities / friends.

I feel  it would help if you thought through what you mean by "Most Value".  It seems to me that this can only be ascertained in the context of what you want to do. Perhaps "Most Value" could be just continuing to live in your current home with enough money to finance the standard of living you are used to possibly with changes made to the house to make it more comforable. On the other hand it could be releasing as much money as possible whilst you are alive to pay for travel, a more comforable life style or whatever.

If you can explain and cost what you want to achieve we could suggest the most efficient way to get the required money from your house. Needing £300K is very different to needing £20K. If there is no benefit you really want that you cannot already afford I cant see any point in worrying about getting Most Value.

It is very thought provoking and I assume my thoughts will change as I get older (currently 54 nearly) - 'value' is difficult to quantify, what is value for someone may not be for someone else. At my age I want to maximise the value of my house in my lifetime - in 20 years I might not care at all and will be happy to live in a similar value property (all be it somewhere warmer) and lose the value of it. Interesting debate.

The best and least stressful way to maximise the value of your house if you are not concerned about spending the money could well be to simply keep it and rely on long term inflation in house prices especially if it is a desirable house in a desirable location..

Oh i definitely want to spend some of the 300k - of that there is no doubt, its just a case of how much 

I suggest you determine why, how much and when you want to spend the money.  Only then can you work out how to ensure the money is available when you want it.  The objectives of course could change in the futuire but you reaslly need something to start with.

Ok the 'why' is easy, because I've paid into it for years so I own it and want some 'value' from it.
How much? - back of a fag packet, £200k
When I want the money? - not so easy to answer -  back of a fag packet again, 70+?

But you get the value from it by living in it and not paying rent.
I’m not trying to be harsh and perhaps I’m misunderstanding but you appear to be saying that you want to live in it (rent free), have access to the money, but also don’t want to pay an equity release company for the privilege (with no actual detail on why you think that’s poor value).
not trying to be harsh but can’t see how all that is compatible.
equity release sounds like a good idea in your situation (If you want to keep your current home), you just need to find a decent shame and not go into it too young.

Yes but the 'value' has been earnt by paying for it over the years to own it outright to be in a situation of not paying rent / mortgage.
At the end of the day I am beginning to realise that if you own you own home and have no dependants to pass it onto then there really is now way to extract 'value' from it - maybe that it what I need to come to terms with.

I agree. the value of owning your own home is enormous in not having to pay rent for even 30-40 years, but owning does come at the price of tying up your capital.
However you seem to be wanting that value and the cash and you just can't have both for free.
You can have both but it comes at a price to do commercially (unless you know someone who would loan you the money until your death in a private arrangement but clearly that has consequences for them).
I think you need to comes to terms with the fact that you can't have the value twice over (living in it for free plus access to cash) for free. You can have it at a price.
You haven't explained why you think equity release is "poor value".
I would agree it's expensive to have a loan for 40 years but that's not the same as "poor value".
A loan just comes at a price that's all. There are risks for the company such as you living a long time or the house depreciating or finding it's built over a sink hole. They have to cover these risks and build in a profit.

Have you said why you wouldn't consider downsizing in your situation? A lot depends on where you are starting from but our parents moved from a modest suburban 3-bed semi to a 2 bed flat and freed up £35K a few decades ago. That bought them a lot of things like holidays rather than just about managing and made a massive difference. It might only be a few £Ks per year to make a big difference to someone's life so you don't need a mansion in London.

yes it is a case of coming to terms with the reality sometimes, but I don't see a big rip-off in equity release, you're just paying a price for a commercial service and perhaps not appreciating all the risks the lenders are taking.
I doubt its a lucrative money making scam as it's regulated and there's competition. It's in a better state now that a couple of decades ago. Some of the schemes have done well because of house price inflation but they couldn't have known that was going to happen or banked on it - they just got lucky like the energy companies right now. They can only assume modest house price inflation over the term. Why should they take massive risks without the return? If I was investing in them I'd want a return commensurate with the risk and so would you.

I had a situation in London a few years ago where I was looking at rented accomodation. Initially I turned my nose up at it, but I accepted the reality pretty quickly that this was "market value" and my choices were to compromise on commute, money or area (living next to crack den), so it took me only a few hours to accept the reality that these were the choices. It was a learning experience.

So why would you expect strangers to make a long term loan that carries risks without them getting a decent return on it?
and what are your concerns with downsizing? (some are absolutely valid)

westv

We ae planning to upsize rather than downsize in a few years or so. Upsize as regards price (for a better location) rather than size.