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Property Ownership

Owning as "Joint Tenants"

This way, neither of you owns an identifiable share of the property. You collectively own the whole thing - essentially you hold it on trust for yourselves. This means that when one of you dies, the property automatically passes to the survivor(s). It does not matter whether or not the deceased co-owner had a Will.

Owning as "Tenants in Common"

By owning this way, you each own an identifiable share of the property. Unless you have stated otherwise, this will be 50% each for 2 owners or one third each for 3 owners etc. You are each free to use your share in any way you want. You can give it away during your lifetime, or can leave it to someone under your Will. Owning as Tenants in Common, the property will not automatically pass to the surviving owner(s) so it is vital that you each have a Will.

Why Is It Important To Own The Right Way?

You MUST own the property as Tenants in Common if you want to:-

  • Give your share to someone else
  • Leave your share under your Will
  • Put your share into trust for someone else’s benefit
  • Engage in any inheritance tax planning
  • Plan for future care fees
  • Have extra flexibility in dealing with your assets

If you don’t know how your current property is owned,  the chances are you own as joint tenants. However, we can easily check this for you. All we need is to see your title deeds.

It is very simple to change from joint tenants to tenants in common. We would be happy to prepare the necessary paperwork and register the change at HM Land Registry on your behalf. 

If you are Tenants in Common already and want to change the share of the property that you each own, this can be done easily and we can provide an estimate of cost for you.

Equity Release Schemes

There are various schemes which allow you to release some of the value (“equity”) that is locked into your home. They allow you to obtain either a lump sum or a regular income or both without having to move home. There are a variety of different schemes available and you will need expert legal and financial advice if you are considering this as an option.

Equity Release schemes have earned a poor reputation in former years, but the regime is now much more regulated than it was. We would still strongly advise you to seek proper legal and financial advice before considering it.

To be eligible for any of the schemes available, you must generally speaking:-

  • Be aged at least 60
  • Own your own home
  • Have paid off all or almost all of any existing mortgage over the property
  • Own a property worth at least £40,000
  • Own a property built out of brick or stone

What different schemes are available?
The schemes fall under 2 broad headings: “Reversion Schemes” and “Lifetime Mortgage Schemes”. Each type will have advantages and disadvantages.

Reversion Schemes

These schemes involve you selling all or part of your home to a Reversion Company. In return, you receive a lump sum or a monthly income. You and your partner can stay in the home, usually rent free, for the rest of your lives. When the property is eventually sold (usually on the 2nd death), the Reversion Company receives a % of the sale proceeds equal to the % of the property that they bought from you.

 

Lifetime Mortgage Schemes

This heading covers a variety of different mortgage schemes, all of which involve you borrowing money secured on the value of your home. Again, you can receive either a lump sum or a monthly income. You continue to own all of your home and the loan is repaid to the lender when your home is sold. You can choose whether to make interest payments or whether the interest is “rolled up” and paid back when the property is sold.

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Frequently Asked Questions

At what point in the process is it legally binding?

You can withdraw from a sale or purchase up until the point contracts have been exchanged. Any deposits paid after exchange of contract will then by non-refundable. After contracts are exchanged you are then responsible for the property you are buying and should arrange suitable insurance from this date.

How can I find out more?

If you are considering releasing some of the equity in your home, please book an appointment and we will be happy to discuss your options. We can meet you with your financial adviser if you wish, to make sure the advice is integrated. If you do not already have a financial adviser, we would be happy to recommend a specialist, independent adviser who can discuss your circumstances in detail.

How long are local searches valid for?

A local authority search completed for a house purchase is valid for 3 months.

How long does the conveyancing process take on average?

We usually say 4-6 weeks for an average sale or purchase. Queries and concerns can often come out of the local authority searches which need further investigation and sometimes this leads to re-approval from the Mortgage lender. This can add further time into the process.

Is Equity Release right for me?

It may be that you could consider other options instead, such as moving to a smaller property or cashing in other “nest eggs”, such as premium bonds or savings.

What happens if we can’t produce certificates for work we’ve had done on the house we’re selling?

You can indemnify the work by taking out an insurance policy. This means that you can not be held liable for any future fault on the work that was done. We can arrange this for you

What is Stamp Duty and how much will I have to pay?

Stamp Duty is a tax levied by HM Government on a transfer of property. For residential property this tax is calculated at 1% for property values between £125,001 and £250,000, 3% for values between £250,001 and £500,000 and 4% for those of £500,001 and over. Duty may also be chargeable on any rental charge (leases only) - this affects both residential and commercial leases where different thresholds are applied.

What is the difference between Joint Tenants and Tenants in Common?

Tenants is Common is where two or more people are entitled to the proceeds of sale in distinct shares - on the death of one, his/her interest will not pass to the survivor(s) but will be part of his/her estate. Joint Tenants are on the other hand 50/50 Co-owners of land - when one of them dies, his/her rights of ownership pass to the survivor(s).

What will it cost?

There are all sorts of “hidden” costs including:

  • Completion, arrangement or application fees
  • Valuation fees
  • Insurance
  • Early repayment charges
  • Legal fees

 

Other considerations

You should also consider the following:

  • If your circumstances change in future, will you be able to move home?
  • Any equity release scheme will affect the inheritance you are able to leave to your children or grandchildren
  • There could be implications for your entitlement to social security benefits
  • Who will be responsible for repairs and maintenance of the property?
  • Tax implications

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