Shared Growth Option
With the Shared Growth Option, an agreed percentage of your client's property is sold to Julian Hodge Bank, in return for a tax-free cash sum which they can spend in any way they wish.
This home reversion plan guarantees the right to occupation for life, so your client may continue to enjoy living in their home, rent free, for as long as they wish.
Who is eligible for the Shared Growth Option?
- A Shared Growth Option plan can be arranged for either one or two people, who own and live permanently in their home, which is located in England, Scotland, or Wales. Plans are available to couples, relatives, friends, etc, who hold the property title in joint names.
- Applicants must be at least 65.
- The property must be in sound condition, of standard construction, and worth at least £60,000.
- Leasehold properties are acceptable, provided the lease has at least 90 years left to run.
- Between 30% and 90% of the property value may be used for the plan.
- If there is an outstanding mortgage or charge, it must be low enough to be repaid from the cash sum expected at completion, unless cleared earlier from other funds.
Commercial property, flats, sheltered/retirement housing, park homes and non traditional concrete/steel framed dwellings are not acceptable.
Please ask for advice if you are unsure about property eligibility.
How much cash can be released?
This will depend on age(s), the property value and the percentage of ownership to be transferred. The older your client the higher the benefit they will receive from the percentage transferred.
Can further cash sums be released?
Your client may apply to release a further cash sum at any time, providing they have not already sold the maximum percentage of 90% either in a single transaction or a succession of transactions. At this time we will also take into account:
- Whether the property has been satisfactorily maintained.
- The lending criteria at the time of application.
A surveyor will re-value the property at your client's expense, and a further proportion of the equity will be transferred to fund the extra cash payment. Your client will be responsible for all your legal fees and costs.
What about moving house?
- Your client will be free to transfer their home reversion plan to a new home of their choice, as long as it meets the criteria, and provides adequate security for the plan.
- If when they move, the new property value is lower than the original, Hodge Lifetime's percentage ownership would not change and they will receive the appropriate share of the surplus made on the sale.
- If the new property’s value is higher, they must be able to find an additional amount from their own funds. Hodge Lifetime’s percentage of ownership will be reduced as appropriate.
- Your client will be responsible for any costs related to the transfer, including all solicitors’ fees for work, even if the move falls through.
What would happen upon marriage or remarriage in the future?
If a single planholder marries, it may be possible to revise the terms of the plan to give the new partner a right of occupation. The new occupant will need to meet the age requirement for the plan and if younger than the planholder, a re-calculation of the home reversion plan will be necessary which may result in a partial repayment being required. This will be calculated by taking into account the percentage of equity already released at any time.
If a right of occupation was not required, the new partner would have to sign an agreement to vacate should the planholder die or move out permanently. The planholder would be responsible for legal fees incurred in either of the above events.
What happens when the property is vacated, or upon death?
Your client must advise us in writing if they anticipate leaving the property unattended for an extended period on any occasion. If they wish to go on a long-stay holiday, or need a term of hospital care, for example, we will need to be aware of the expected length of their absence. We will also ask for assurance that the property will be adequately protected, insured and secured during that period.
When the client vacates the property, for example to move out permanently with relatives, or into a residential care home, or in the event of death, the house should be cleared so that it can be formally released to us. We will arrange marketing, and our Solicitors will handle the sale, by liaising with the client's Solicitors. The selling price will be mutually agreed and our Solicitors will make sure that the proceeds are correctly divided when received.
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Find out more about
Hodge Lifetime by calling our
Broker Support Unit on:
0800 731 4076