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Properties with Agricultural Ties Equity Release 2024

  • Remove tax-free cash from your home
  • You don’t need to make regular monthly payments
  • Help your family to buy a house
  • Stay living in your property
  • Equity Release for properties with agricultural ties new for January 2024

How much money can I get?

You can borrow 60% of your property’s valuation. For example, if your house is valued at £210000, you can get £126000.

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Homeowner in their 70s
Money tied up in home
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Equity Release for properties with agricultural ties

Equity Release Rates in the UK Housing Market

Equity release schemes have grown in popularity among UK homeowners, especially among the ageing population. These schemes allow individuals to tap into the equity of their home, offering a valuable financial resource without the need to move. The rates and terms can vary, making it essential for potential users to understand the nuances before taking the plunge. This comprehensive guide dives deep into equity release rates, exploring various schemes available to UK homeowners.

Lifetime Mortgage Rates

Lifetime mortgages are the most popular form of equity release. They allow homeowners to borrow a portion of their home’s value. Depending on the agreement, Interest is added to the loan amount each year or month.

How Do Lifetime Mortgage Rates Work?

When you take out a lifetime mortgage, the lender offers a loan based on your property’s value. You retain ownership of the property and the loan, and interest is repaid when the home is sold or the homeowner dies.

Fixed vs. Variable Lifetime Mortgage Rates

Fixed Rates

With fixed rates, the interest rate remains constant for the duration of the loan. This offers predictability in terms of interest accrual.

Variable Rates

Variable rates can change based on external economic factors. These can be capped, ensuring they don’t exceed a specified limit.

Interest Only Lifetime Mortgage Rates

An interest-only lifetime mortgage allows homeowners to pay off the interest regularly, ensuring the loan amount remains constant.

Benefits of Interest-Only Lifetime Mortgages

With these mortgages, homeowners can manage the loan’s size by paying off interest, ensuring the debt doesn’t grow over time. This can be beneficial for those wanting to leave an inheritance.

Potential Drawbacks

Regular payments may not be feasible for everyone, mainly if the homeowner’s income is limited post-retirement.

Interest Only Retirement Mortgage Rates

These mortgages are geared towards retirees who have a regular income source, allowing them to pay monthly interest.

Determining Eligibility for Retirement Interest only mortgage rates

To be eligible, retirees must demonstrate a steady income, such as pension or investment income.

Advantages Over Standard Lifetime Mortgages

These plans can offer more flexibility in repayments and can often come with more competitive rates, especially if the homeowner has a substantial retirement income.

Retirement Mortgage Rates

Retirement mortgages combine elements from both standard and interest-only mortgages, targeting retirees.

Flexible Repayment Options

These mortgages often allow for flexible repayments, enabling retirees to manage their debts effectively without straining their finances.

Considering the Longer Tenure

Given that these mortgages are tailored for retirees, they often come with extended tenures, accommodating the unique needs of older homeowners.

Pensioner Mortgage Rates

Mortgages designed for pensioners can offer unique terms and rates, acknowledging the limited income flow post-retirement.

Key Features

While similar to retirement mortgages, pensioner mortgages are exclusively for those receiving pension benefits. Lenders often consider the pension amount while determining the loan terms.

Potential Limitations

Given the age and potential health concerns, these mortgages might come with higher interest rates, reflecting the increased risk to lenders.

RIO Mortgage Rates (Retirement Interest Only Mortgages)

RIO mortgages allow retirees to pay only the monthly interest, with the principal amount repaid once the property is sold or the homeowner dies.

Eligibility and Benefits

RIOs can be a good fit for retirees with consistent monthly incomes but might not have a significant lump sum to pay off traditional mortgages.

How RIOs Differ from Other Mortgages

While they share similarities with interest-only lifetime mortgages, RIOs often have more flexible terms and potential for more competitive rates.

Release Equity: Understanding the Process

Equity release refers to unlocking the value tied up in a property without the need to sell it.

The Application Process

It involves property valuation, consultation, legal checks, and finally, the release of funds.

Repayment Mechanisms

Repayment is usually deferred until later, typically when the homeowner passes away or the property is sold.

Retirement Interest Only Mortgages vs. Standard Equity Release

Both options offer ways to tap into a property’s value but cater to different needs and financial situations.

Comparing Features

RIO mortgages generally offer more repayment flexibility, while standard equity release might allow for a more significant lump sum upfront.

Assessing Long-Term Implications

Considering the long-term implications, such as the potential erosion of inheritance or the accumulation of interest, is crucial before deciding on either option.

The UK equity release market offers many options catering to various needs. Understanding the rates, terms, and long-term implications is paramount whether you’re eyeing a lifetime mortgage or considering a RIO. Always seek professional advice before deciding, ensuring your chosen equity release scheme aligns with your financial goals and circumstances.

Understanding Agricultural Ties in the UK Property Market

The UK property market is vast and varied, with various regulations and conditions. Among these, agricultural ties, or agricultural occupancy conditions (AOCs), are prevalent but often misunderstood. Let’s delve deeper into what these ties entail, their implications, and their impact on homeownership.

Agricultural Occupancy Condition: A Definition

What is an Agricultural Occupancy Condition?

An agricultural occupancy condition (AOC) is a planning condition applied to a dwelling, limiting its occupancy to people primarily or last employed in agriculture. Essentially, it means the house can only be inhabited by someone working in farming or forestry.

Agricultural Ties: What’s the Connection?

Agricultural ties are synonymous with AOCs. They both refer to the same planning condition stipulating who can occupy a dwelling based on their occupation in agriculture.

Why Do Agricultural Ties Exist?

Preserving Agricultural Land

AOCs help ensure that houses built in the countryside, primarily for agricultural workers, remain available for them and aren’t bought for alternative purposes, potentially inflating rural property prices.

Limiting Rural Urbanisation

They also serve as a tool for local councils to control the spread of urban development, ensuring rural areas maintain their primary function as spaces for farming and forestry.

Inheriting a House with Agricultural Tie

Inheriting property can be daunting, and it becomes more complicated if an AOC is attached.

Can You Live in It?

To live in a house with an AOC, you’d generally need to satisfy the agricultural occupancy restriction, meaning someone in the household should be involved in agriculture.

Options for Beneficiaries

Those who inherit such properties but don’t meet the conditions might consider renting them to someone who does or exploring removing the agricultural tie.

Removing an Agricultural Tie

How to Satisfy Agricultural Occupancy Condition

Before attempting removal, owners should understand if they can satisfy the condition. This might involve proving one’s agricultural employment or demonstrating a genuine attempt to rent the property to eligible occupants.

How Much Does It Cost to Remove an Agricultural Tie?

The cost varies, involving engaging planning consultants and potentially legal experts. Moreover, there’s no guaranteed outcome, so homeowners need to weigh the potential benefits against costs.

Removing Agricultural Ties: The Process

A planning application must be submitted to the local council. Evidence might be required to show that there’s no longer a functional need for an agricultural worker to live on the property.

Agricultural Tie and Council Tax

There’s a common misconception that properties with an AOC benefit from reduced council tax. However, the council tax is usually determined by the property’s valuation band and not its occupancy conditions.

Implications of Living on Agricultural Land in the UK

Can I Live on Agricultural Land UK?

Living directly on agricultural land without proper dwelling permissions can lead to legal complications. Temporary structures might be used, but these also have their own set of rules.

What Can You Build on Agricultural Land UK?

Building on agricultural land requires planning permission. Some temporary agricultural structures, like barns, might be allowed, but converting them into dwellings is another matter.

Tied Housing and Agriculture Mortgage

What is Tied Housing?

Tied houses are properties that come with employment. A farm owner might provide a house as part of an employment package for a farm manager. The accommodation is “tied” to the job.

Agriculture Mortgage: Financing Farms and Tied Properties

Specialised mortgages exist for agricultural properties, acknowledging the unique revenue streams and challenges of farming. These differ from regular mortgages and are tailored to the agricultural sector’s needs.

Navigating the Sale and Purchase of Agricultural-Tied Property

Agricultural Tie Property for Sale

When buying or selling properties with an AOC, making the tie explicit in listings is crucial. This ensures potential buyers are aware of the occupancy conditions.

Can You Build a House on Agricultural Land UK?

While you can build agricultural structures like barns, erecting a house requires planning permission. Even then, it might come with an AOC attached.

Impact on Property Value

AOCs can impact property value, often reducing it compared to unrestricted rural properties. This is because the pool of potential buyers is limited to those involved in agriculture.

Frequently Encountered Terms and Their Meanings

What is an AOC?

As earlier stated, A

OC stands for Agricultural Occupancy Condition. It’s a planning condition that restricts the occupancy of a dwelling to someone primarily involved in agriculture or forestry.

Tied, Tie-in, and Tie Land

While ‘tied’ usually refers to housing associated with employment (like farm managers living on-site), ‘tie-in’ is a term more broadly used in business contexts, meaning a marketing strategy involving promoting one product with another. ‘Tie land’, on the other hand, isn’t a standard term in the context of agricultural ties but could be interpreted as land that comes with certain restrictions or conditions.

What Does AOC Stand For?

AOC stands for Agricultural Occupancy Condition, a planning restriction applied to certain rural dwellings.

Mortgageability Meaning

Mortgageability refers to whether a property can be mortgaged. Some factors, like agricultural ties, can influence a property’s mortgageability.

Period Property Meaning

A period property is a building built in a distinctive historical architectural style or era. These homes often have unique character and features that make them desirable, but they can also come with challenges in terms of modernisation and maintenance.

Agricultural Ties: Broader Implications and Considerations

Agricultural Restriction

Agricultural ties or AOCs act as a restriction, ensuring that rural properties serve the agricultural community. These restrictions have both benefits and challenges. While they preserve rural areas for agricultural workers, they can also limit the marketability of such properties.

Tied Houses and Mortgage Challenges

Mortgaging a property with an agricultural tie can be challenging. Lenders might see them as a risk due to their reduced marketability. However, some specialist lenders understand such properties’ nuances and offer tailored products.

Agri-terminology: Clarifying Common Confusions

With terms like ‘agricultrual’, ‘agricultral’, and ‘agricultural’, it’s easy to get confused. The correct term is ‘agricultural’, referring to farming and the science of cultivating soil, producing crops, and raising livestock.

Properties with Agricultural Ties: Looking to the Future

Changing Landscape of Agriculture

As the agricultural sector in the UK evolves with technology and market demands, the nature of employment in farming is also changing. This might influence future interpretations and applications of AOCs.

Modifications to Agricultural Ties

It’s plausible that as the demographics and nature of farming change, there might be pressures to modify how agricultural ties are applied. Potential changes could involve broadening the definition of who qualifies to live in such tied properties.

Value Implications

If regulations around agricultural ties loosen or tighten in the future, this could impact the values of these properties. Prospective buyers and sellers should stay informed about the changing landscape.

Agricultural Ties: Not Just a Rural Concern

Urban Interfaces with Agriculture

As urban areas expand and interface with rural zones, understanding agricultural ties becomes essential, even for those not directly involved in farming. This is especially true for property developers and investors eyeing land on the peripheries of urban centres.

Country House with Farm Buildings Attached

Properties that merge residential and farming elements, such as a country house with farm buildings attached, can offer unique living experiences. They blend the tranquillity of rural life with the functionality of farming but may come with AOCs attached.

Final Word

While agricultural ties or Agricultural Occupancy Conditions can seem complex, understanding their origins, implications, and future trajectories can help potential buyers, sellers, and inheritors make informed decisions. As with any property concern, consulting with professionals, from estate agents to solicitors familiar with rural property nuances, can provide invaluable insights.

How much is it expected to release from a home

The more elderly you are and the more illnesses you have, the more tax-free cash you can release.

Tenants In Common Equity Loan

Areas of the UK where equity release is popular

  • Cranbrook
  • Hatfield
  • Budleigh Salterton
  • Nailsworth
  • Lewes
  • Axminster
  • Nailsea
  • Colburn
  • Brampton
  • Keighley
  • Much Wenlock
  • Thame
  • Glossop
  • Buckingham
  • Malvern
  • Heanor and Loscoe
  • Christchurch
  • Brentford

Equity Release LTV Percentages

  • 50% monthly payment life time mortgage Royal London Equity Release
  • 25% loan to value monthly payment lifetime mortgage Platform Mainstream
  • 60% loan to value monthly payment lifetime mortgage Key Retirement
  • 30% loan to value (LTV) home reversion plans Clearly Loans
  • 30% loan to value monthly payment lifetime mortgage Prestige

Crown Equity Release
Release Equity In House Under 55

More to life Mortgages

Pure Retirement Lifetime Mortgages

  • Hodge Lifetime Mortgage Flexible Drawdown Plan
  • More to Life Capital Choice Plan
  • Bridgewater Equity Release Schemes
  • Pure Retirement Classic Voluntary Payment Super Lite
  • Lloyds Bank Equity Release
  • Saga home reversion schemes
  • Age Partnership Equity Release
  • Liverpool Victoria LV Equity Release Schemes
  • NatWest Equity Release Plans
  • Royal Bank of Scotland Equity Release
  • Aviva Equity Release Schemes
  • Stonehaven Equity Release Plan
  • More 2 Life Capital Choice Plus Plan
  • Age Partnership Lifetime Mortgage

What are the current Bath Building Society interest rates for equity release?

Bath Building Society rates for equity release are 2.18% APRC.

Challenging to finance home variants can include rent charges properties with a high estate rentcharge, leasehold properties with a short lease, typically less than 70 years, or a defective lease, derelict property or where part of the building is in severe disrepair and needs demolishing, asbestos construction and missing planning permission or building regulations approval.

Retired small business owners who may be interested in lifetime mortgages

  • Other processing and preserving of fruit and vegetables Dewsbury
  • Hairdressing and other beauty treatments Crook
  • Tanning and dressing of leather; dressing and dyeing of fur Withernsea
  • Research and experimental development on biotechnology Chard

Tough-to-finance home titles can include properties built or converted into dwellings more than 10 years ago, properties with a single annexe or other self-contained part of the property, properties without direct access to an adopted highway or which are accessed over an unmade road, properties that have solar farms or a large number of wind turbines on the land and properties with mobile phone masts which are within influencing distance of the house.

Equity Release for properties with agricultural ties

Difficult to mortgage property variants include pre-fabricated reinforced concrete (PRC), timber framed properties built between 1920 and 1965, properties with a minimum floor area of 30 square metres, coach houses, i.e. freehold properties with garages beneath and basement or lower ground floor flats without level access to private or communal garden space.

Aviva lifetime mortgage

Challenging to finance home variants can include properties where proposed building works have not yet commenced, age-restricted properties, right to buy – properties in England, Wales and Northern Ireland, leasehold properties (except flats and maisonettes) and properties where the borrower(s) own the freehold with any connected party.

Hodge Lifetime lifetime mortgage

Common loan-to-value percentage ratios of Aviva retirement mortgages over 65, Shepherds Friendly interest only mortgages for people over 60, Churchill over 60 lifetime mortgages, Skipton Building Society interest only lifetime mortgages for people over 60, Nottingham Building Society later life interest only mortgages over 75 and Progressive Building Society later life interest only mortgages over 60 are 50%, 55% and 70%.

Canada Life - Lifestyle Gold
Tenants In Common No Fees

Does Bath Building Society offer Equity Release?

Yes, the Bath Building Society Equity Release is 1.84% MER.

Do Bath Building Society do Pensioner Mortgages?

Yes, Bath Building Society Pensioner Mortgages are 1.83% APR.

Pitfalls of Equity Release Plans

Interest-only lifetime mortgages can reduce your estate value. A monthly payment lifetime mortgage may impact the ability to claim entitlements. You may need to pay a legal fee and you could be exposed to changes in interest rates with some products.

It is often individuals looking for lifetime mortgages with flexible drawdown cash release, lumpsum lifetime mortgages or lifetime mortgages with flexible drawdown cash release. However, the Telegraph, like Zurich, are keen to see paperwork to show your personal circumstances in the form of investment statements.

Some of the most common loan to values of LV= interest only lifetime mortgages for over 70s, More to life later life mortgages for over 70s, One Family mortgages for pensioners over 60, Yorkshire Bank later life interest-only mortgages over 75, Royal London pensioner mortgages over 70s and SunLife later life borrowing schemes over 55 are 35%, 60% and 65%.

Do Bath Building Society do Retirement Mortgages?

Yes, Bath Building Society Retirement Mortgages are 1.94% MER.

UK Equity Release Providers

  • Key Retirement
  • Liverpool Victoria
  • More to life
  • Legal & General

Typical loan to value percentage ratios of TSB equity release plans for people over 60, Barclays Bank retirement mortgages over 65, Post Office remortgages for people over 50 years old, Legal & General interest only mortgages for over 60s near London, Royal Bank of Scotland RIO mortgages over 75 and Nationwide Building Society pensioner mortgages over 70s are 45%, 60% and 70%.

Non-Standard Property Home Index

Does Bath Building Society offer Equity Release Under 55?

Yes, Bath Building Society Equity Release Under 55 is 2.22% MER.

The 1st and 2nd charge lender will want to know if the property is a Detached freehold house or a Leasehold house and if the resident is a Private Tenant.

Agricultural tie or restriction•Over 10 acres of land•Farms/smallholdings

Properties with more than 10 acres of land•Small scale hobby farming

Properties with up to 10 acres of land without large outbuildings or equestrian facilities
Properties with more than 6 bedrooms

Many of the most appealing retirement finance offerings are Lloyds mortgages for 60 plus pensioners, Barclays Bank interest only mortgages for over 65 year olds, Post Office mortgages for over 65, Legal & General pensioner mortgages over 70s and Nationwide Building Society mortgages for 60 plus pensioners.

Does Bath Building Society offer Lifetime Mortgages?

Yes, Bath Building Society do lifetime mortgages at 2.01% MER. Bath Building Society Lifetime Mortgages have a loan to value (ltv) of 70%.