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By (user no longer on site) OP
over a year ago
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Just seen this article on Breakfast News. Government going to get involved in this market so older people "sell" part of their house to government and gov get the cash back from estate when they die.
Isn't it bad enough that our whole economy for the last 20 years has been based on an ever spiralling property market stopping younger buyers getting anywhere and building up a bubble waiting to burst....the last one was just a little pop!
Surely this will make it worse with no properties to pass on to next generation....
Anyone else thought how this May work? |
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By (user no longer on site)
over a year ago
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Depends...I don't know the details but if the part the government gets back is taken off the value of the property on the death of the owner will it reduce inheritance tax liability? If so that could be a good thing.
If it runs in a similar way to the help to buy scheme it will be a percentage not a set value so the government will get the benefit of any uplift in property prices.
In my opinion the government only ever do something if it's good for them, whether it's good for the people is immaterial  |
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By *bi HaiveMan
over a year ago
Forum Mod Cheeseville, Somerset |
Depends how it works.
This kind of scheme has been available in the private sector for years - and has always been a scheme most IFAs have advised to avoid.
The major issue is people drawing lump sums and then living longer than anticipated - leaving them with no equity, no money from other sources and living on very limited incomes.
Depending on the set up and assuming it's properly run it could be a useful way of people using a percentage of the value of their home - and the government would be more likely to run it as less of a profit making scheme unlike most of the unscrupulous private sector firms who deal in this market.
Most are as generous in their terms and conditions as your average payday lender.
A |
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By (user no longer on site)
over a year ago
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Sadly, my parents did this about 6 years ago. They went with a 'proper' bank. What was a 20.000 release turned into a 120.000 pay back. Such a rip off. I know they didn't miss out but they would have been sad to know our inheritance wasn't what it could have been. |
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By (user no longer on site) OP
over a year ago
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My main point is it's just another way of falsely boosting the economy on borrowed money.... It will all come home to roost in an enormous crash at some point! |
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I have not liked the vultures that have been in the market to date, and a government controlled one may be more ethical - it is the detail that is important. Overall, if you take a service, not knowing what the actual cost will be, it does not seem fair. Ie a % of rises in value, thus an unspecifie cost, would be taken later. Not so good for remaining family. In future willed money will be more important to help the young get into the market, and this would reduce it. Unsure overall. |
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By *bi HaiveMan
over a year ago
Forum Mod Cheeseville, Somerset |
"My main point is it's just another way of falsely boosting the economy on borrowed money.... It will all come home to roost in an enormous crash at some point!"
Not really.
The concept enables those who's only asset is the home in which they live to utilise some of the value whilst they're still alive! Mainstream lenders won't touch the elderly (quite rightly!) in terms of standard secured lending so a decent, fair, regulated scheme would be useful to those who need access to those funds without having to sell their property and downsize/rent/move in with family.
It's hardly an economy boost.
I'd much rather my parents enjoyed their retirement while they can, spent what they have earnt in their working lives and if push came to shove - utilised the value of the home THEY bought and paid for, rather than worry about leaving any kind of inheritance for my siblings and I.
A |
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By *wiftieeMan
over a year ago
near Glasgow |
"My main point is it's just another way of falsely boosting the economy on borrowed money.... It will all come home to roost in an enormous crash at some point!
Not really.
The concept enables those who's only asset is the home in which they live to utilise some of the value whilst they're still alive! Mainstream lenders won't touch the elderly (quite rightly!) in terms of standard secured lending so a decent, fair, regulated scheme would be useful to those who need access to those funds without having to sell their property and downsize/rent/move in with family.
It's hardly an economy boost.
I'd much rather my parents enjoyed their retirement while they can, spent what they have earnt in their working lives and if push came to shove - utilised the value of the home THEY bought and paid for, rather than worry about leaving any kind of inheritance for my siblings and I.
A"
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By (user no longer on site)
over a year ago
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Inheritance is mostly a moot point with the average age going up, all of my siblings are over 50 now, and mother is looking healthy enough to make at least another decade. So depending on inheritance to jump start our lives would be a very false economy.
It is an artificial economy boost through another avenue to credit. but what is wrong with that?
A far more sensible approach that helps with inheritance tax, and keeps the interest repaid on sensible levels is for the future inheritors to buy a share of the property, with a standard rate mortgage (you won't get base rate interest on this kind of deal but can get reasonable rates). You may become liable for capital gains tax this way, so crunch your numbers and options carefully. |
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