Like other reversions, the client can retain a share of their home but Retirement Plus doesn’t buy at a discount. This allows home owners to release part of the value of their properties, while also ensuring that a percentage remains within their ownership, either for future advance or for eventual inclusion in their estate.
Retirement Plus has introduced this option in response to market demand, as it has found that many homeowners would welcome the benefit of releasing part of the value of their homes.
Retirement Plus launched its Property Plan reversion product late last year, enabling releases based on the properties’ full market value and a range of flexible lifestyle options. Property Plan differs from a typical home reversion product, in that it involves the company co-owning the property with the customer. The share of the property is purchased from the customer at full market price and then Retirement Plus’s share of the property increases at an agreed fixed rate each month.
The features of the product include:
- The release rate is more than is available with a lifetime mortgage
- Reassurance of a protected share to leave as an inheritance
- Sum released based on full market value of property (compared to advances of 50 per cent of valuation with some products)
- Minimum sum released £25,000
- Retirement Plus pays stamp duty on releases up to £250,000
- No early redemption penalties (but minor admin charge)
- Retirement Plus’s percentage share of property to grow at set rate (currently the equivalent of an annual rate of 5.5 per cent)
- After five years any falls in property values to be shared proportionally between Retirement Plus and home owner
- No negative equity, no future claims against residents’ estates
- Ease of portability, including into sheltered accommodation
- Will not insist on property sale if resident goes into nursing home
- No linked product sales
Further examples of Retirement Plus’s flexible partnership approach are:
- Reasonable business use permitted, including lodgers and tenants
- If the homeowner increases value of property through investment, Retirement Plus will recalculate its share accordingly
- Willing to assist with leasehold enfranchisement, repairs and improvements
- Property Plan allows up to three people to be party in the agreement
- Retirement Plus will also offer free legal advice on property issues
Retirement Plus is backed by FTSE 100 property company British Land and the UK’s leading property-related asset manager, Delancey. Its chief executive is Duncan Young, who has long experience in the property and financial services sectors, including a period as deputy chairman of the Council of Mortgage Lenders and as chief executive and founder of the Household Mortgage Corporation.
Duncan Young said: “When we launched this product it represented a significant development in the market, with full property valuations, lifestyle flexibility and a lack of exit penalties. The protected share option has been added in response to a clear market need and we are confident that it will prove popular."
