Use Equity Release to buy a holiday home abroad!

15th August 2019

Croissants for breakfast; tapas for lunch; gelato whilst watching the sunsetting on the Mediterranean coast……..owning a holiday home abroad makes this a typical day for an Equity Release customer who has released the wealth in their property to buy their dream home in the sun.

Do you dream of buying a ‘Place in the Sun?’ A holiday home on the sunny Spanish coastline, or a countryside villa in the pristine Swiss mountains? By releasing some of the equity in your property this dream could easily become a reality and could be more affordable than you think.

Last year the number of people releasing equity from their property to fulfil lifetime dreams and ambitions totalled almost 83,000, unlocking a healthy £3.94bn from their housing wealth*. The reasons for releasing these funds vary significantly from one homeowner to another - home improvements, clearing debts, gifting relatives onto the property ladder, funding care costs – and buying a holiday home in the sun is becoming an increasing popular choice amongst clients wishing to access this wealth.

A holiday home in the South of France

In fact, this is exactly what Mr and Mrs Birrell of Southampton are planning to do later this year after deciding to release a tax-free lump sum from their house to enable them to buy a property outright in the French countryside region of ‘Nouveau Acquitaine.’ Since her early 20s, Emma Birrell has held onto her dream of owning her own ‘Pied-à-terre’ in the beautiful French countryside and relive her days working as an au pair in a French family. ‘The aroma of freshly baked baguettes, the heady scent of an early morning espresso, the familiar clicking of the cicadas in the surrounding landscape fills my heart and soul with a nostalgic comfort that I want to be able to experience every day again. Recent life events have made Emma realise that life is precious – ‘Live in the present, live life to the full, life is too short - that has become my new mantra’. Shaun shares this dream with Emma and together they have made the decision to fulfil a lifelong dream of buying a holiday home in France with the money they have accessed from their property with Equity Release. ‘Knowing that this vehicle was available to enable me to live the life I wish is a gift. ‘

Who can use Equity Release to buy a second home?

Depending on the value of your property, your age and health, you could release enough wealth from your first property to make a cash purchase on a holiday home, contribute a healthy deposit or make regular payments towards the purchase price. Who wouldn’t want the guarantee of a sunny climate, an alpine retreat or the experience of a new inspiring cultural lifestyle in this way?

So how does it work?

The most popular form of Equity Release is a Lifetime Mortgage which allows you to release money from your home without having to move. It’s a loan that is secured against your property, at a fixed rate of interest that can be taken out either as a lump sum, as a regular income or spread over a number of years using a drawdown facility ( different interest rates may be applicable to drawdowns). Like a traditional mortgage, you can choose to pay back only the interest on the initial loan or pay back both the interest and the capital in regular monthly instalments. However, you also have the option to let the interest roll up and you never make a single payment, the cost of the loan being paid back from the value of your estate when you either die or go into long term care. Whatever Lifetime Mortgage plan works best for your personal circumstances there will always be a ‘No Negative Equity Guarantee’ meaning that you will never owe more than the value of your estate and you can stay living in your own home for as long as you choose.

A ‘Golden’ lifestyle living between countries

The beauty of buying a Holiday home overseas is that you can choose to spend your time where the climate suits your needs at different times of the year. Escape the harsh British winters in warmer Mediterranean climates, enjoy the snow season in the Alps in early Spring, or enjoy the guarantee of summer sunshine on the Mediterranean coast. A choice of climate is not the only advantage of an overseas lifestyle: you can experience the delights of different cultures and cuisines, learn a new language, make new friends or be closer to family living abroad. Provided that the property is kept in good condition, that you are a UK taxpayer and remain living in your UK residence for at least 6 months of the year, you can enjoy this luxury that your Lifetime Mortgage can give you.

If releasing wealth from your property to purchase your dream home abroad is of interest to you, please contact Kevin Woods on 01489 454545 or kevin.woods@therightequityrelease.co.uk to discuss your situation in confidence and without any commitment or obligation.

* https://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/fund-holiday-home-equity-release/

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Equity release is the answer to so many financial questions. If you would like to know more about it, and see if it could be the right move for you, please book an appointment or request a call-back