PlayMandy Brookes is packing up her life.
After spending nine years caring for her sick mother, all that Mandy has left to her name is in a pile of boxes.
The Manchester home Mandy has lived in for more than a decade, and which her late mother planned to leave as an inheritance, is now up for sale. But Mandy will be getting little of the proceeds.
Property-rich but cash-poor, her elderly mother signed up for an equity release scheme with a company. For a small monthly income (£1 per month) and a lump sum of £20,000 she handed over the deeds of the house and a massive chunk of its current and any future value (57% of property value). Now that her mother has died, the property must be sold to honour that contract.
An outraged Mandy contacted Tonight with Trevor McDonald after watching our programme earlier this year that exposed the financial problems arising from equity release products sold by banks and building societies and targeted mainly at pensioners.
In this latest episode, Tonight reporter Jonathan Maitland tells Mandy’s story and meets other Britons in a similar predicament because they or their relatives tried to unlock some of the value of their property to have some extra cash to spend on repairs or few of life's little luxuries.
Maitland also revisits Reg Baylis, who took out a Barclays shared appreciation mortgage (SAM) nine years ago to borrow £20,000 for home improvements. Baylis featured in Tonight’s last equity release programme and he is now living in a mobile home.
Around 15,000 people took out SAMs, which are no longer sold on the market.
In return for lending you a lump sum of money, the bank would get up to 75 per cent of any future increase in the value of your home. If house prices stayed the same, you got a good deal. But if your house value went up by say £100,000, the bank would get £75,000 of that.
After Reg’s wife died, he decided to sell his beloved bungalow. House prices were rising and the more they went up, the more profit the bank made on the sale of the house. The house sold for £185,000 but almost £100,000 of that went towards repaying the original loan.
Since the original report aired in March, Barclays has set up a hardship scheme that offers some of its SAM customers either an interest free, payment free loan so they can redeem their SAM and purchase a more appropriate property or a non-repayable grant to make adaptations to their property.
Reg, however, has been turned down for the scheme because he is not considered to be suffering hardship. Tonight’s Maitland puts tough questions to Catherine French from Barclays on whether or not the scheme goes far enough to help its former customers and asks why people like Reg have not qualified.
The programme also investigates the repercussions of a new financial product on the market. Homeowners facing repossession or needing to release cash in a hurry are being tempted with new schemes promising a quick sale and the chance to rent their home back once sold. But as the Tonight programme discovers, the product does not always live up to what it says on the tin.
If you are affected by any of the issues raised in the programme, visit the following Equity Release /Sale and Rent Back
Barclays Shared Appreciation Hardship Fund
To find out more and to apply for the Barclays Shared Appreciation Mortgage Hardship Scheme:
Telephone: 0800 282 390 (freephone)
or 0044 207116 7488 from abroad
Or email: customer.relations@barclays.com
Struggle Against Financial Exploitation (SAFE) is a Parliamentary Working Group aspiring to bring forth answers from those responsible for the control and policing of banking, financial services and the judiciary. It also has a helpline on 0208 630 9990 or website www.safe-online.org/
Safe Home Income Plans (SHIP) is a company supported by the leading providers of home income and equity release plans. It was launched in 1991 and is dedicated entirely to the protection of planholders and promotion of safe home income and equity release plans. www.ship-ltd.org/
Citizens Advice Bureau
The Citizens Advice service helps people resolve their legal, money and other problems by providing free information and advice from over 3,000 locations, and by influencing policymakers. www.adviceguide.org.uk/
HIPS 97 Tony Craven runs a national support group for victims of failed Home Income Plans, HIPS 97. He can be contacted on Tel 01964 670614 or email: abcraven@breathe.com.
Financial Services Authority Are an independent body that regulates the financial services industry in the UK. www.fsa.gov.uk/
Andrea Rozario – Equity Release Expert www.rozarioharris.co.uk
Trading Standards – For consumer protection information in the UK www.tradingstandards.gov.uk/
Which? Campaigns to get a fairer deal for all consumers. For more information see: //www.which.co.uk/
