An 'asset' rich but 'cash' poor widow has turned to her grandson in a new take on the option of equity release.
Joan Simpson is an 84 year old widow who lives in a house worth close to £500 000 in Wilmslow, Cheshire. She has several savings policies and investments in shares yet she was struggling to afford to have her house painted or send her great grandchildren presents at Christmas time.
Like many other elderly property owners Mrs Simpson started to look into equity release schemes as a way of generating the extra income she needed. Both of her children live overseas so she spoke with her grandson, an employee of the Essex Police Service about the options she felt she had available.
"Speaking with my grandson I realised that equity release schemes can lead to a large chunk of the value of my home being swallowed up to repay the loan, plus interest," says Mrs Simpson. "My grandson had just read something about co-buying and came up with a plan that suited both of us down to the ground."
The plan Mrs Simpson has opted for involves her grandson and his family purchasing a 5% stake in her property – thus generating a payment of £30 000 for her to spend as she wishes whilst simultaneously reducing her exposure to inheritance tax in the future. The agreement has been verified by independent solicitors for both sides and all other members of the family have been given the option to buy into the property at the same time.
"A new Co-buying Network gave me the idea," says the grandson, Christian Robinson from Burnham, Essex. "I cannot afford a property in Wilmslow but by helping my Nanna to benefit from an equity release in her property I am not only helping her but also gaining a foothold on the property ladder myself".
Newly launched website www.youtoshare.co.uk is the co-buying network referred to and the owners of the site hope that this will be the first of many equity release based inter familial co-buying relationships developed through the site in the UK and Internationally.