Mortgage Solutions exclusively revealed Octopus Lifestyles’ launch into the market last month.
Later Living Now managing director Simon Chalk told Mortgage Solutions this was the first plan he knew of which allowed people to continue to own their home if they moved into care.
The Octopus Lifestyles product guide states: “If you move into care you may not need to repay the loan at that time, as long as an agreed maintenance plan is in place.”
Chalk said he was excited by this element and noted it would fill a growing need.
“It accounts for 20-25% of my entire work so it’s a worthwhile part of the market, and in terms of fulfilling a social need it’s got huge potential,” he said.
“When you consider the growing numbers of aging people – they don’t want to go into care, they want to be at home, and so they should.”
Extra revenue stream
Chalk added that such an approach could be vital if things go wrong.
“Some people go into care and it doesn’t work and then they move back home, so imagine if you’ve had to sell it,” he continued.
“So having a plan where the client does not have to sell it as long as they can supply a maintenance plan, they’ve then got a potentially significant extra revenue stream helping towards care and the maintenance costs of property and so on.”
Regular income plan
Chalk is also positive about the future for the sector – ambitiously suggesting it should be a minimum £10bn-sized market by the early 2020s.
However, he urged lenders not to rest on their laurels and continue innovating.
“I would like to see greater innovation,” he said.
“I would like to see a genuine income plan allowing a client to take out a set amount per month or year – it’s pre-agreed and pays out while the client is alive but is not a drawdown product.
“This would work well alongside the care fees planning,” he added.