The financial planning firm, part of the Million Plus group and sister company of Largemortgageloans.com, deals with larger and more complex mortgages for individuals looking to purchase a home in the UK’s luxury property market.
Founder and CEO of Largemortgageloans.com and the Million Plus group, Paul Welch (pictured), said he anticipated large equity release transactions to be a growing trend particularly as a result of the recent move to cut the lifetime pension saving allowance from £1.25m to £1m.
“I see large equity release being quite a big trend and we’ve seen that more recently where a lot of people in their eighties don’t have the income to support the debt that they’re borrowing. We’ve had quite a number of these transactions come to us recently and I see that become more of a trend going forward, certainly in the larger mortgage loan market.”
Welch added that the new restrictions on the lifetime pension savings allowance ‘penalised’ wealthier clients who would be forced to downsize in retirement due to the cost of upkeep for larger properties.
“I’m training up people to become specialists and take the required exams because we’re seeing more of it. When you look at the pension cap of £1m, you can only get £50,000 a year from a £1m pension pot. The lifetime allowance is great, but how the hell is some poor old chap that may have a £2m to £4m pension pot going support a mortgage on a £12m or £15m house that he’s inherited generation after generation?
“We’ve seen a few cases recently where the new rules have penalised elderly customers and they don’t want to sell their house because it’s been with their family for around 100 years.”
