Land & Property
Equity release can play a crucial role in retirement funding
Products that meet the Equity Release Council product standards have safeguards and flexibility built in to them, which enables thousands of home owners every year to tap safely in to their housing wealth without having to worry about making monthly repayments.
Equity release enables people to use the capital that they have in their property in a number of different ways, to:
- give gifts to the family during their lifetime that can help to reduce liability to Inheritance Tax;
- supplement any savings and pensions to fund their own retirement;
- provide a capital lump sum to assist a son or daughter in purchasing property with a deposit;
- release funds from a property on a divorce, to allow both parties to have a home.
What is Equity Release?
Equity Release allows individuals aged 55 and over to release money from the property they live in. This money is released, without the need to make any monthly repayments and without the need to move out of your home.
Equity Release products are regulated by the Financial Conduct Authority (FCA). By using an equity release product, you can take a lump sum, or regular smaller sums, from the value of your home.
There are three types of equity release:
- Lifetime Mortgages;
- Home Reversion; and
- Home Income plans.
Lifetime Mortgage Schemes
With Lifetime Mortgage schemes you take out a loan based on the value of your home. This loan is secured against your home, and releases a tax free lump sum. There are no monthly repayments, as the interest is added to the loan, and the loan is only repaid when your home is sold or if you move into long term residential care. Sometimes the loan is flexible, so you can draw down smaller amounts at different times.
Home Reversion Schemes
Under this arrangement you sell the whole, or a part, of your property to the equity release company. You can live in your home for as long as you wish. The property is sold when you die, or move into long term residential care, and the equity release company receives a share of the proceeds in proportion to the percentage of the property you sold to them.
Home Income Plans
This type of scheme is similar to the Lifetime Mortgage scheme but, instead of receiving the loan by way of a lump sum, the loan is used to purchase an annuity that gives you a regular guaranteed income.
The first step is to take independent financial advice from an Independent Financial Adviser who specialises in Equity Release.
You will need advice about your options for you to be able to weigh up the advantages and disadvantages fully before you decide if equity release is right for you. You will need to speak to a specialist financial adviser who is qualified in equity release to help you understand the steps involved and talk you through your options. Things to consider include the effect this might have on state benefits, tax, and your estate.
Equity release is not right for everyone, but with the right financial advice based on your individual personal circumstances, you will be able to make that choice.
Once you have spoken with your financial adviser and have made the decision to take out an equity release plan, we are here to answer your questions and, if you decide to proceed, ensure that the transaction goes through as smoothly and as quickly as possible.
Browns Solicitors is a member of the Equity Release Council. All the Equity Release Council’s members follow a strict Statement of Principles, which ensures we act in your best interests. As an equity release customer, you have the right to independent legal advice so you fully understand the cost and commitments involved.
If you think Equity Release is the right choice for you, please telephone our conveyancing department to make an appointment for a free half-hour initial consultation.
Our experienced Conveyancing Department is here to advise you on all aspects of renting a commercial property, and buying or selling business premises. You may be a new business, be ready to expand or want to sell and retire, or move on to a new venture.
Most commercial property is occupied under leases. This can give a business greater flexibility. However commercial leases usually contain detailed controls on the occupier’s freedom to ‘assign’ (transfer a right in the property to another) or otherwise deal with the property. It is important before entering into a lease to fully understand the rights and restrictions. This is where we come in.
Residential Property Buying and Selling
Moving home and buying or selling a property can be very stressful; we are here to help you through the process. If you require assistance with this, please contact us so we can advise you of our availability.
Residential Property Lease Extensions
The law gives tenants who have purchased a leasehold property a legal right, subject to meeting certain conditions, to extend the lease on their property.
You can extend a lease either by entering into a mutual agreement with the freeholder, or exercising your legal right. If you exercise your legal right to a lease extension, it will add 90 years to the length of the lease (and reduce the annual ground rent to nothing – or in legal parlance, a “peppercorn”.)
Before you enter into a lease extension, you need to decide whether it is worth the effort and expense. As a general rule of thumb, if the lease is less than 90 years you should almost certainly try to extend it. This is because:
- Properties with shorter leases are less valuable than ones with long leases (this is particularly true if leases are below 80 years)
- Properties with shorter leases can be more difficult to get a mortgage on, because mortgage companies will worry that its value might decline and so won’t be good security
- Properties with shorter leases can be more difficult to sell
Our conveyancing department can also assist you with:
- Transfer of Equity / Deed of Gift – this involves the transfer of one owner’s share of the equity to the remaining owner. A deed of gift is where no payment is made.
- Deeds of Covenant – whereby a new buyer or tenant agrees to comply with the rules and conditions affecting the property binding them in the same way as the previous owner/tenant
- Statutory Declarations for Title Rectifications – a formal declaration by an individual explaining any problems with the property’s title and often claiming the existence of rights acquired by the passage of time
- Transfer of Registered Estates / First Registration – dealing with the legal formalities, a process involving the Land Registry
- Freehold enfranchisement – rights of leaseholders as a group to purchase the freehold of a building, often happening together with lease extensions
- Property acquired at auction – offering exciting and potentially profitable opportunities, but requiring research and not without risk
- Remortgages – a remortgage can be for many reasons, including: better terms; requirement to release capital; on separation
- Buy to let – dealing with the mortgage requirements, purchase of property and tenancies
- Declarations of Trust – for those entering into a purchase jointly and wanting to record their respective shares
- Assents – following a death transferring the property to beneficiaries
The purchase of land should always be conducted by an expert.
Use our knowledge and conveyancing expertise to answer important questions relating to issues such as permitted use, boundaries, footpath or other public access and rights over the land issues.
Our job is to check that the land has clear title – i.e. is legitimately for sale – and to carry out searches. We will also check the legal documentation relating to the size, scale and dimensions of the site to ensure that you are buying what is being sold. You also need to be sure that you can obtain the necessary approval for your intended use.
Frequently asked questions
Although we strive to answer all your queries by email or telephone, a significant number of calls or emails does restrict us progressing your sale or purchase.
For this reason we:
- Will charge for additional telephone calls or emails which exceed the normal cause of dealings in a conveyancing matter;Have produced the following Frequently Asked Questions which we ask you to look at before contacting us with a query.
If you have any further questions you think would be helpful on this page please feel free to send us an email.