A new equity release scheme has just been unveiled where wealthy homeowners can raise cash sums of up to £2 million on their homes.
The ‘Prestige Options’ plan is being offered by a company called Retirement Advantage and is aimed at those lucky enough to own a home worth up to £6 million.
The minimum withdrawal is £¼ million on which interest is chargeable at 5.29% a year. There is also the option of organising a drawdown facility, but for that the interest rate increases by 0.2%.
Retirement Advantage say the product has been created for homeowners looking to use their property wealth to gift assets to the next generation.
Head of product and marketing, Alice Watson, said: “Owners of high value properties are sitting on substantial stores of wealth which could make a significant contribution to their retirement planning.
“This product has been designed to help in response to the growing number of clients who intend to use their property to gift funds to their children as part of an intergenerational wealth transfer.”
Prestige Options is only available to homeowners aged 60 or over and is offered on properties worth between £500,000 and £6 million.
However, ‘in certain circumstances’ they are prepared to consider lending on properties worth more than £6 million. Valuations would be carried out on a ‘case by case’ basis.
The equity release market in general is growing at an exponential rate. Recent figures from the equity Release Council show that owners withdrew £10 million a day from the value of their homes in the first quarter of the year.
The total raised in 2017 topped £3 billion – a record amount.
The number of £1 million plus houses in the UK has soared in recent years and is no longer restricted to London and the Home Counties.
There are almost 770,000 of them, ranging from a two bedroom flat in south London to a Grade 2 listed country retreat in Wales.
The most expensive home currently available for sale in the UK is the £91 million Updown Court which boasts 24 bedrooms with a master suite which opens up onto a private indoor pool.
The extensive grounds include two guest houses, a gatehouse, three swimming pools, 11 acres of gardens, tennis courts, a lake and a helicopter pad.