Lazy Days announces a program to facilitate your Spanish holiday home acquisition.
Many people having made up their mind to relocate or holiday in the Mediterranean find their plans thwarted because they cannot sell their home or otherwise borrow the cash required.
If you are considering raising cash through equity release, you may want to consider the
Lazy Days Holiday Home Support Scheme which is due to come into effect in May 2009.
Under this scheme run by Lazy Days Holiday Homes Ltd. (LDHH) you may be eligible to receive funding for this type of investment and then pay it back when you do sell your house or your estate is settled.
With this scheme you agree to sell a share of your house in return for the full purchase price of your holiday home. The price will be less than the market value of the share of your house that you sell. You are not borrowing against the value of your house but are actually selling part of your home.
So, for example, if your holiday home cost forty thousand pounds (£40,000) and your house was valued at one hundred thousand pounds, (£100,000.00), LDHH would be buying 40% share of your house, they would later on receive 40% of the proceeds from selling your home – either when you move out or after your death. The other 60% would go to you or to your estate after your death.
Generally the Lazy Days Holiday Home Support Scheme is referred to as a
“Fixed share contract” and will end when:
- You permanently move out of your house (or, depending on the contract, you move out for more than a certain number of months);
- you die; or
- you sell your house;
which ever happens first. You need to think carefully about:
- What share of your house you are prepared to sell;
- how the cash sum provided to purchase your holiday home compares with your houses real market value when you eventually sell it.
Under the fixed share contract, LDHH funds the acquisition of your holiday home in return for a fixed share of your house.
The percentage they own and the percentage you keep is fixed from the start and cannot change, no matter how long you live or what your property is worth in the future.
LDHH undertake to meet conditions of the Consumer Protection Code. This means they will:
- give you the necessary documents and full details of the total costs involved, including all interest and charges.
- tell you about the importance of getting independent legal advice;
- deal with complaints quickly, efficiently and fairly.
You cannot change or reverse this kind of contract. However you may negotiate with LDHH to buy back the share you sold them, and you can actually sell your home on the open market at any time by coming to an agreement with LDHH. This would allow you to cash-in the value of the percentage of your home you still own.
When you die, your family or other beneficiaries may be given the option to buy back the percentage that LDHH owns. If the value of your home has increased due to inflation, it may be difficult for them to raise enough money to do this.
As the Lazy Days Holiday Home Support Scheme involve selling part of a property, LDHH who provide the plan are not regulated as such. This means consumer credit laws and Consumer Protection Code do not apply. However LDHH is regulated by the Consumer Credit Act and is so licensed under License number XXXXXXXX.
Advantages and disadvantages of Lazy Days Holiday Home Support Scheme:
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Advantages:
You can acquire your holiday home
by selling part of your house and can
continue to live in it. Although LDHH
owns a part of your home, you don’t
pay rent until after two years, depending
on the contact.
If property prices fall, you will benefit
having received a value based on
prices before the fall.
It is not a loan so there are no repayments
And you are not charged interest.
It is a fixed share contract, you continue
to own a fixed percentage of your property
LDHH is licensed under the Credit Act.
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Disadvantages:
The value you receive for your holiday home
will be less than the market value of your share.
The difference between the market value and
the value of the holiday home you acquire for the
share you sell is the true cost or value of this
scheme.
You won’t benefit from all the full increase in the from
value of your home if property prices rise. LDHH
benefits from the rise in the value of its share.
You only benefit from an increase in the value of the
share you still own.
You can’t use your home as security to get a loan
(although you may be able to sell more of it to LDHH to raise more cash).
As these schemes involve selling part of a
property, LDHH do not have to meet the conditions
of existing consumer credit laws. The financial Ombudsman cannot deal with the complaint, so you may have to take legal action if you have a serious complaint.
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For further information call Sue Wiseman at 01795 503 754 or mobile 0034 679 224 974
Alternatively, Michael J. Dyde at 01795 503 751
Yours sincerely
Managing Director