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Equity Release Update - November 2013

Crown and Bridgewater

As promised last month, this final instalment will look at Crown (new to the ERC) and Bridgewater, both reversion lenders in the Equity Release market.

  1. As you would expect, the information/documentation required from the borrowers is much more involved as both lenders view the transaction in the same way as a purchaser would in a normal conveyancing transaction, so that borrowers will need to arrange an Energy Performance Certificate ("EPC") and will have to complete the standard sale forms (Sellers Property Information form). These forms are lengthy and can be quite daunting. In the case of Bridgewater, their name must be endorsed on the insurance pre-completion.
  2. Identification is required for both lenders, but in the case of Bridgewater this needs to be certified by a Solicitor - they will not accept IFA certified ID.
  3. At Ashfords we spent many months working with Bridgewater to finely hone a fast working process that works well, and cases with proactive borrowers can complete in less than 40 days. However, the Crown process is much more lengthy (typically 3 months minimum from start to completion), as Crown's Solicitors will do a full title/search check before issuing the offer/papers to sign.
  4. Please also be aware, and you may want to forewarn your clients, that on Crown cases the money is funded by private individuals, so the clients will end up not with deeds in the name of Crown, but rather the private individual. This is sometimes off-putting for clients, albeit they are protected in their homes with the documentation.
  5. Finally, in relation to Bridgewater please remember that clients will still end up with a set of deeds; whilst they may come off the freehold deeds they will be issued a set of leasehold deeds in their names.

Obviously with a reversion case there is a lot more paperwork and it is very involved. Borrowers need much more "hand-holding" and a legal expert is crucial to ensure they receive the best advice and are not wrongly deterred.

If we can be of any assistance then please do let me know.

Equity Release News

  • 03.10.13 - ERC brings in more safeguards to protect consumers, including a suitability report and a requirement that borrowers receive face to face legal advice.
  • 14.10.13 - ex GMAC-RFC Chief operating officer Godfrey Blight has joined Crown Mortgage Management as a director.
  • 16.10.13 - Third quarter figures are in - agreed sales of £284.1m the highest since 2008. A 14% rise compared with last year. 97% of all sales were from intermediaries. The average release has grown to £57,107, the highest figure since records began in 2002.
  • 17.10.13 - Age Partnership to roll out investment proposition for at and in-retirement market in the first or second quarter of 2014.