Jump to content
House Price Crash Forum
Sign in to follow this  
AdamoMucci

Buy To Let investment boosted by Equity Release

Recommended Posts

https://www.lettingagenttoday.co.uk/breaking-news/2018/8/buy-to-let-investment-boosted-by-equity-release--claim

 

Quote

....

According to Retirement Advantage, the findings illustrate a growing willingness among over-55s to use property wealth more widely than in the past. 

It claims that in the second quarter of this year, one in 10 customers took out an equity release loan in order to fund a new property purchase. This compares to 6.6 per cent who used equity release for this reason in 2017.

In addition, 14.1 per cent of customers used equity release to buy a car last quarter (compared to 9.9 per cent in 2017) and nearly one in four used some ER funds to go on holiday.

....

 

Where to begin...

These specific over-55s are living in the past. Clearly they have learnt nothing.

I cannot figure out the exact mechanics of why this stuff is going to cause problems; I just know it will. For the ER companies, for the people using them for consumption, whatever.

It is also a one time shot in the arm. Once the ER has been taken, that is it. Blown on a holiday? Then it has gone. Blown on a car? 50% depreciation in 3-5 years.

Definitely storing up problems.

Share this post


Link to post
Share on other sites
48 minutes ago, AdamoMucci said:

I cannot figure out the exact mechanics of why this stuff is going to cause problems; I just know it will. For the ER companies, for the people using them for consumption, whatever.

The term you are looking for is Ponzi

good, the more ER to fund cars and lifestyle, the quicker the balance will be restored

Share this post


Link to post
Share on other sites
8 hours ago, AdamoMucci said:

These specific over-55s are living in the past. Clearly they have learnt nothing.

These people were adults during the boom and bust of the late 80s as well as the boom and bust ending in the GFC. I just don't get it either.

But you only need to see the adverts to see the target audience: "Get a tax-free lump sum". Like why would anyone even think they would need to pay tax on a loan unless they were really stupid?

I guess these people are just being played. The whole reason Gidiot relaxed pension rules was to get retired boomers speculating in BTL.

Edited by Captain Kirk

Share this post


Link to post
Share on other sites
8 hours ago, AdamoMucci said:

https://www.lettingagenttoday.co.uk/breaking-news/2018/8/buy-to-let-investment-boosted-by-equity-release--claim

 

 

Where to begin...

These specific over-55s are living in the past. Clearly they have learnt nothing.

I cannot figure out the exact mechanics of why this stuff is going to cause problems; I just know it will. For the ER companies, for the people using them for consumption, whatever.

It is also a one time shot in the arm. Once the ER has been taken, that is it. Blown on a holiday? Then it has gone. Blown on a car? 50% depreciation in 3-5 years.

Definitely storing up problems.

Equity release will probably eat away the majority of the equity in your house if you borrow a sizeable amount. But it could be a way to convert equity to income for the duration of your retirement. 

Share this post


Link to post
Share on other sites

Well my Mrs just went to look at an old people’s home for her Grandad.. He has A house in SW London, big pensions and 1000’s in the bank! 

But not for long.. £1100 a week for the home.. 

so with the current house prices he has about  10-12 years including his pension and savings!

maybe blowing the lot and letting the young bail you out again is the only plan there is.. 

unless you save/debtfree/careful with your money.

Then you will be taken to the cleaners! 

Edited by macca13

Share this post


Link to post
Share on other sites
14 hours ago, macca13 said:

Well my Mrs just went to look at an old people’s home for her Grandad.. He has A house in SW London, big pensions and 1000’s in the bank! 

But not for long.. £1100 a week for the home.. 

so with the current house prices he has about  10-12 years including his pension and savings!

maybe blowing the lot and letting the young bail you out again is the only plan there is.. 

unless you save/debtfree/careful with your money.

Then you will be taken to the cleaners! 

Increasingly, it will make sense for younger generations to simply give up working and just look after their elderly folks. Protect 4-5k net off your inheritance per month...that's the equivalent of earning an 70-80k salary.

 

As far as the topic goes - love it. Idiots who should be rinsed.

Share this post


Link to post
Share on other sites
On 31/08/2018 at 23:41, macca13 said:

Well my Mrs just went to look at an old people’s home for her Grandad.. He has A house in SW London, big pensions and 1000’s in the bank! 

But not for long.. £1100 a week for the home.. 

so with the current house prices he has about  10-12 years including his pension and savings!

maybe blowing the lot and letting the young bail you out again is the only plan there is.. 

unless you save/debtfree/careful with your money.

Then you will be taken to the cleaners! 

He needs to set up a discretionary trust asap.That would at least save 5 years of wealth as they can only count transfers for 7 years.So keep  7 years home money and transfer the rest into the trust,you can set one up with a solicitor for a few hundred,iv set up two one for a family member already.Then of course he needs to withdraw £200 a day every day in cash and pass to relatives.That will get rid of a lot quickly with no trace.Any questions it went in bookies,nothing they can do.

Share this post


Link to post
Share on other sites
19 hours ago, Frugal Git said:

Increasingly, it will make sense for younger generations to simply give up working and just look after their elderly folks. Protect 4-5k net off your inheritance per month...that's the equivalent of earning an 70-80k salary.

 

As far as the topic goes - love it. Idiots who should be rinsed.

Thats exactly what we have done before and will do again.My partner and daughter are nurses.If my dad needs it he will move in with me and my partner will pack in her job if she hasnt already,she wouldnt need asking twice.Even if it was just me i could do it easy.Id get some of the local carers who go around the houses on cash in hand.The girls with the private firms going around all have fiddle jobs during their round.A friends mam gets a call in the morning to get her up and a lunch time call for food etc for £50 a week cash in hand.She puts her to bed each night.

Edited by durhamborn

Share this post


Link to post
Share on other sites

I can understand people doing this with their PCLS when they go into draw down on their pensions but to actually equity release to raise a deposit for a BTL mortgage means you have borrowed 100% of that property's cost.

All fur, no knickers. 

Share this post


Link to post
Share on other sites
19 hours ago, Frugal Git said:

Increasingly, it will make sense for younger generations to simply give up working and just look after their elderly folks. Protect 4-5k net off your inheritance per month...that's the equivalent of earning an 70-80k salary.

 

As far as the topic goes - love it. Idiots who should be rinsed.

Yes. Makes a load of sense, but I doubt most people will have the intelligence to work that out. 

It also increases the incentive to remortgage or ER to help the kids with deposits etc. No point in having a load of cash lying around when you get too old to spend it  

The other side of the coin of course is that if you want to help your kids, the best thing to do is to stay fit and healthy for as long as possible. If a heart attack or cancer gets you, at least it’s all over quickly. Slowly progressing chronic conditions are a family wealth killer.

Share this post


Link to post
Share on other sites
42 minutes ago, durhamborn said:

Thats exactly what we have done before and will do again.My partner and daughter are nurses.If my dad needs it he will move in with me and my partner will pack in her job if she hasnt already,she wouldnt need asking twice.Even if it was just me i could do it easy.Id get some of the local carers who go around the houses on cash in hand.The girls with the private firms going around all have fiddle jobs during their round.A friends mam gets a call in the morning to get her up and a lunch time call for food etc for £50 a week cash in hand.She puts her to bed each night.

Yeahbut ... carehomes are staffed by highly trained staff not just some woman theyve dragged off the street.....

Share this post


Link to post
Share on other sites
2 hours ago, spyguy said:

Yeahbut ... carehomes are staffed by highly trained staff not just some woman theyve dragged off the street.....

Depends on the level of care.My partner is a nurse in the community,she does all the home from hospital visits etc and very few old people need to go in a home,most though do need help on a different scale.Some simply need help getting up and putting to bed,others need shopping done,some meals making,some a bath,all different.A lot depends on how close the family is and if they care or not and can help out as well.From her experience the ones who end up in a home tend to be those who get it free and have families who dont really care,and ones whos kids have a career and are often at the other end of the country.The others are ones who end up in for a couple of months at the end of their life.There are times when there is no alternative of course,but there are many more options than simply handing over a lifetimes work to a care home while the person next to you gets it for free.Even if it means you can stretch into to 7 years where they cant chase assets and have everything in a trust by then.

Share this post


Link to post
Share on other sites

There are many ways to provide care, different kinds of care for different people... For example some only need help in getting up, washed and going to bed, perhaps bit of help with food and shopping, they want to stay in their homes, some if they can move downstairs. This is where someone who has been vetted and wants accommodation could live with the elderly person whos mind is active but body frail... Help them when required keep them company but could still have a job to go to during the day....most elderly people are very independent wise and interesting people, they might just like to know someone is there.... Win Win. 😉

Share this post


Link to post
Share on other sites
On 02/09/2018 at 09:08, durhamborn said:

He needs to set up a discretionary trust asap.That would at least save 5 years of wealth as they can only count transfers for 7 years.So keep  7 years home money and transfer the rest into the trust,you can set one up with a solicitor for a few hundred,iv set up two one for a family member already.Then of course he needs to withdraw £200 a day every day in cash and pass to relatives.That will get rid of a lot quickly with no trace.Any questions it went in bookies,nothing they can do.

Thanks for the info I will pass it on.. It seems wrong that those who have just turned up, never worked, blown all their money, will get care for free.. 

Looking at the figures for US and U.K. it’s not sustainable.. With US liabilities for Medicare, benefits, pensions and debt pushing $100 trillion..

U.K. has its own aging population disaster and reckless government planning.. or lack of. 

Share this post


Link to post
Share on other sites
On 01/09/2018 at 13:59, Frugal Git said:

Increasingly, it will make sense for younger generations to simply give up working and just look after their elderly folks. 

All very well if you can cope with someone eventually wetting the bed 3 times a night, because they keep taking their incontinence pads off,  up and down half the night demanding to go out for fish and chips/to a job they haven't had for years,   or demanding 16 times a day to go 'home' to somewhere they haven't lived since 1959, angrily accusing you of stealing their things/money, which they've hidden so successfully it's months until they turn up.....   etc. etc. etc. 

A walk in the park, obviously. 

Share this post


Link to post
Share on other sites
1 hour ago, Mrs Bear said:

All very well if you can cope with someone eventually wetting the bed 3 times a night, because they keep taking their incontinence pads off,  up and down half the night demanding to go out for fish and chips/to a job they haven't had for years,   or demanding 16 times a day to go 'home' to somewhere they haven't lived since 1959, angrily accusing you of stealing their things/money, which they've hidden so successfully it's months until they turn up.....   etc. etc. etc. 

A walk in the park, obviously. 

Thankfully dementia is not a certainty when we grow old.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 146 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.