smaller text
bigger textAlternative to equity release for IFA's
LAUNCH OF NEW PROPERTY FINANCE PRODUCT WILL PROVIDE IFAs WITH "AN ALTERNATIVE TO TRADITIONAL EQUITY RELEASE SCHEMES"
Commission rates of 1.25% of property value available to IFAs
Following the launch of Find & Afford - a unique product from retirement finance and property specialist Homewise - people aged 65 and over are now able to move to property of their choice at a fraction of the cost without having to contend with much of the stress involved in moving.
Homewise has introduced an attractive set of commission rates for its Find & Afford product and is inviting intermediaries such as IFAs and estate agents to contact the company about the benefits and suitability of the new product. IFA commission rates are currently 1.25 per cent of the property value, which means intermediaries could earn as much as £1,875 on a £150,000 property.
Homewise has been piloting Find & Afford as an alternative to traditional equity release schemes and has already achieved strong sales and positive feedback. Following this, it is now being made available throughout the whole of the UK.
The product allows customers to potentially release a significant amount of money through the sale of their current home that is tax-free, and, unlike traditional lifetime mortgage equity release schemes, does not accrue interest, which in some cases can be high.
Find & Afford enables pensioners to move into a home for life at a substantial discount of typically between 24% and 53%(1) of a property's asking price. The pilot test has revealed that the average discount is around 40%. By offering such discounts, the scheme also means that customers often don't have to use all of the capital raised from selling their existing home, and can use it to improve their day-to-day standard of living, increase their retirement income, to pay off debts or even to provide an early inheritance.
The pilot test has revealed that a typical customer pays around £84,742 for their new home through the scheme, making an average saving of up to £56,494 on the property's asking price. The average value of the properties customers sell to finance their new Find & Afford homes is £160,881, although property values vary.
Homewise figures show that on average, through Find & Afford, a typical customer releases around £76,139 of capital that was tied up in their home, which can dramatically improve their standard of living. And they get to live in a property that meets their specific requirements - from the location to the level of security and its dιcor. Customers can also rely on their own team of specialist Homewise consultants who will take the stress out of the process by negotiating with estate agents and solicitors, coordinating the move itself and being on hand to ensure that everything runs smoothly.
Mark Neal, managing director of Homewise, said: "Find & Afford enables retired people to live in the property of their choice, which they might not normally be able to afford. At the same time they can release significant capital from the sale of their current home. Find & Afford is a viable alternative to lifetime mortgage equity release schemes.
"We believe that this product provides IFAs with an innovative alternative to existing equity release schemes which will enable them to offer a wider range of more flexible solutions to their clients."
Properties selected through Find & Afford are owned by Homewise and/or its investors, but the company provides the customer with a lifetime lease enabling them and their partner to live in the property for the rest of their lives(2). Find & Afford is most suited to over-65s in good health who are looking for the security of a long-term home, which they can choose from anywhere in the country and which meets their specific requirements. They benefit from paying only a fraction of their new home's market value and as Find & Afford is portable; this allows them to move to another property if their circumstances change.
Key features of Find & Afford include:
Major discounts on the asking price of a property: People aged 65 and over can live in a property and pay between 47% and 76% of its market value. The discount will depend on the customer's age and individual circumstances. This means that they can improve the quality of their retirement by living in a property that they might not normally be able to afford and which may be more suitable for their needs.
Free property search: Homewise has a team of property specialists who can take a brief from a customer to find a home anywhere in the UK that meets their particular requirements.
Purchasing a customers existing home: If a customer is finding it difficult to sell their home in order to raise capital to purchase a new property through Find & Afford, Homewise will offer to buy their home. The price it offers will be based on two independent surveys.
Purchasing your new home: If you decide to purchase a property through Find & Afford, Homewise will negotiate the price for you, deal with the estate agents and solicitors and all general issues regarding the property's purchase.
Portability: Find & Afford customers are free to move to other properties. If they don't want to incur any additional costs on the lease, they can move to a new property the value of which is equal to or less than the current value of their home.
Professional help in moving: Homewise can provide access to a discounted home removal service and a panel of recommended solicitors.
Refurbishment: Customers can pay to use Homewise's team of professional vetted tradespeople to carry out refurbishments to their new home.
Transparency: Homewise encourages all of its customers to consult with their families and to take legal advice before deciding on whether Find & Afford is an appropriate scheme for them.
Mark Neal added: "We estimate that retired homeowners are sitting on over £1 trillion of equity in their homes, but many feel that they do not have enough cash to fund the type of lifestyle they want in retirement. For some, using Find & Afford to find a better home to live in and at the same time release capital from the sale of their current home could transform their lives."
Research(4) from Homewise reveals that around 1.2 million pensioners are living in poor quality accommodation, with defects ranging from damp, to leaking roofs or flaking paintwork. The company says around one in five of those who need to renovate claim they simply can't afford to get the work done and says that the Find & Afford Plan is one solution if you can no longer cope with maintaining your own home.
To find out more about Homewise's range of services please contact: 0800 043 4477. Alternatively, log on to http://www.findandafford.co.uk/.
Notes to editors
(1) Discounts are calculated on age, gender and marital status.
(2) A lifetime lease is purchased with a lump sum payment that guarantees that the customer can live in the property until their demise or that of the remaining partner.
(3) This is based on the current UK average rental on a two bedroom property of £935 p.c.m and does not allow for inflation.
(4) Phonebus research conducted by TNS with a representative sample of 383 GB adults aged over 65 years between 23 February and 4 March 2007.
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