Buying land from neighbour who has equity release issue

Elmroad82

Or can somehow a lease be put in place with an option to buy? 

user1977

Elmroad82 said:

propertyrental said:

I doubt this is going to go anywhere. One of the many downsides of equity release.

What professional can advise on this? A solicitor? 

She already has a solicitor. Who has given her the advice so far? I don't see an obvious alternative way of doing it anyway.

Elmroad82

user1977 said:

Elmroad82 said:

propertyrental said:

I doubt this is going to go anywhere. One of the many downsides of equity release.

What professional can advise on this? A solicitor? 

She already has a solicitor. Who has given her the advice so far? I don't see an obvious alternative way of doing it anyway.

Yes she has a solicitor. I wasn’t sure if there was a professional who deals more with the specifics of ER 

sheramber

Elmroad82 said:

user1977 said:

Elmroad82 said:

propertyrental said:

I doubt this is going to go anywhere. One of the many downsides of equity release.

What professional can advise on this? A solicitor? 

She already has a solicitor. Who has given her the advice so far? I don't see an obvious alternative way of doing it anyway.

Yes she has a solicitor. I wasn’t sure if there was a professional who deals more with the specifics of ER 

You could try AgeUK  who have an advice line but I donlt know if anybody can help because any decision will be up to the ER company and what percentage of equity release is involved.

What jave the neighbour's said about this development?

Have they pursied any alternative with the ER company?

Elmroad82

I’m not sure…I’ll see if they’ll divulge this to mum.

Hoenir

Speak to the neighbour. On the face of it. The deal is £50k to the ER company plus consideration for the land to the neighbour. Is it possible to negotiate a larger piece of land in compensation. 

Grumpy_chap

I am not sure this will ever get the neighbour much by way of additional funds.

AIUI, the neighbour sold % of the property for ER in 2018.  That % has dropped by 5% or £50k.  That would mean the ER acquired a share of the property worth £1m, but will only have paid a fraction of that, say half (assumption).

Before anything can happen, the ER company want their £50k (5% loss) making good.

What proportion of the property now belongs to the ER company?  Is it a £2m property, so the £1m acquired by the ER company represents half?

Then, the idea to sell a part of the garden for £40k.  But the same proportion of that garden belongs to the ER company as the rest of the house, so the ER company get £20k and the couple living there get £20k.  Is that enough to make it worth while for the couple living there?

Who will pay all the legal fees, purchaser, tenants, ER company?

If the couple living in the property got, say £500k (half of the £1m house value) in 2018 and already burned through cash so they need to raise more funds now, another £20k or £40k is not going to last them long.  (This might not be extravagant spend if there are care issues or similar to fund.)

Bigphil1474

I think it's a bit more complex than that, AIUI. The ER company are saying that the property has dropped in value by £50k since 2018 (which seems odd anyway, unless they mean as a result of sale of this garden area, but still odd), but the ER want the entire £50k payment as a result, not their proportion of the £50k relative to what they own of the property (which also sounds odd). No idea.

MeteredOut

Elmroad82 said:

Hoenir said:

Are her neighbours trying to raise money without recourse to the ER company.  Othertwise the exercise is of no benefit to them. Who is going to pay all the associated legal charges ? 

I cant seem to redeit the original post... but yes they were trying to raise money. My mother had got the land valued and the valuer said due to the overall size of the garden and the small piece being sold, that selling it would have no impact on the value of the neighbours house. The ER valuer  verbally agreed.... but subsequently in writing then said the house had fallen by 50k in value and that's the issue.

Is the ER saying the house has fallen in value by £50K since purchase (or since the ER was made) or that the neighbour selling the land would reduce the value of the house by £50K below its current value?

Some posts are assuming the former (as what is written across posts is a bit ambiguous) but I'm wondering if its actually the latter.

gwynlas

I think the ER company are trying to make money holding the neighbours to ransom. I doubt that there is anyway your mother can purchase this land until such time as neighbouring property sold so pointless spending more at this stage. Future owners might be happy to sell or might wish to retain whole of garden.
If the current neighbours intend to remain in the property would they consider allowing your mother to tend the portion of garden she would like to buy? That way she would have the increased space she would like to cultivate and providing she did not invest too much in planting or hard landscaping would not be out of pocket.