Home Reversion
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What is a
home reversion plan?
A home reversion plan is one of the two main types of equity release, where you can stay in your home, without paying any rent, until you die or go into full-time care. A home reversion plan involves you selling all or part of your home at less than market value in return for a tax-free lump sum, regular income or both.
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What customers say
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Extremely helpful
They were extremely helpful with my recent equity release. They sorted everything out for me and kept me up to date with weekly phone calls. They were extremely pleasant and friendly. They made the whole process very simple for me.
Charlotte Harris
Top service
Top service provided and equity release completed very quickly, would recommend for anybody to use the service to arrange equity release for them.
Barry Stones
First-class
Our adviser was first-class, making everything clear and concise. So we knew exactly how to proceed with our proposed equity release. The support from head office was also excellent throughout the whole process.
David Alexander
Very professional advice
Very professional advice, and ended up with a very good deal, which my research has indicated is the best currently available.
Claire Norton
Helpful at all times
Everything fully explained so you are always kept in the loop. They don't try and rush you or push any product on to you they just give you their advice. Very friendly and helpful at all times.
Connor Davis
Stress-free experience
The process of obtaining equity release has been a stress-free experience with a friendly and efficient service and carried out in a most professional manner.
Deborah Matthews
Answering your questions
Still unsure of a few things? We've got you covered with a few simple answers to some of our most frequently asked questions.
A home reversion is one of the main two types of equity release that allows you to access equity tied up in your home. You're required to sell all or part of your property at less than market value in return for tax-free cash.
You can spend the money as you wish and receive it as either a lump sum, regular income or a mix of the two whilst staying in your home, rent-free. The easiest way to find out how much you could release is to use our equity release calculator.
With a home reversion plan, you sell all or part of your home for less than market value in return for a cash lump sum, a regular income or both. You'll be able to continue living in the property until you move into long-term care and sell the property or pass away.
When you sell your home, the reversion company will receive their share of the profits of the sale, and the rest will go towards your estate. If you sold your entire property, then the equity release provider will get all of the profit.
The home reversion scheme will end when your property is sold, which is usually when you have moved into long-term care or passed away.
Yes, you can choose to sell all or part of your property to a reversion company in exchange for tax-free cash and live in it without any additional payments.
Unlike a lifetime mortgage, you are not borrowing against the value of your property, and therefore there isn't an interest roll-up. With a lifetime mortgage, you can pay voluntary payments to prevent interest from building whilst staying in your property.
That isn't the case with a home reversion plan, although you’ll typically only get up to 60% of the market value of your property, depending on your age.
A home reversion plan could be suitable for older people who may need to supplement their retirement income, by raising money on the back of their property, without having to move out. The prospect of moving to a different home or location could be unsettling, and with this option, you could benefit from lifelong residency.
The worry of selling equity in your property at lower prices could mean a smaller inheritance for family members. Although, if you're not as concerned about leaving behind a large inheritance, then the benefits of having your income topped up in your retirement could make this a popular option for you.
However, as with all big financial decisions, you must get the right advice. Our selected financial advisers are on hand to help to ensure you make the right decision for you by understanding all of the benefits and risks.
The minimum age for taking out a home reversion plan is typically 65 years old, which you'll both need to be if you're taking out a joint plan, unlike a lifetime mortgage, where the minimum age is 55 years old.
Your home reversion plan must be for a property in the UK that you own and where you live. There may be other restrictions, such as the value and condition of your property.
Home reversion plans are regulated and supervised by the Financial Conduct Authority (FCA). It is also a requirement that equity release providers are a member of the Equity Release Council (ERC).
A home reversion plan is a form of equity release. The main two types of equity release are home reversion and lifetime mortgage.
Equity release plans today are a lot more flexible. You don’t have to take out a lump sum: you could opt for a regular income instead or a mix of the two.
The amount you'll be able to borrow will depend on your age, health and value of your property. A provider may ask for a larger share of equity from your home the younger you are. The home reversion company may have to wait several years before they can cash in their share. So, the older you are, the more money you're likely to get.
For example, lenders may allow a 65-year old couple with a home worth £200,000 to borrow £40,000 as a lump sum, which is 20% of its current value, in exchange for a 70% share of the property. However, after 20 years, the house value could have gone up considerably, benefiting the firm and leaving the couple with a much smaller share.
When you take out a home reversion plan, you typically can't cancel your contract as you have sold either all or part of your home. Your financial provider will be able to discuss all of the pros and cons before you take out an equity release plan.
However, in some cases, your equity release provider may allow you to buy back the share that you sold to them or come to an agreement to sell your home on the open market. That would mean you could cash in the part of the property that you own.
Alternatively, your estate may have the option to buy back the shares you sold to the home reversion provider after you die.
Home reversion providers may ask for a larger share of equity in your home the younger you are, as they may have to wait several years to cash in their share.
If you sell part of your house, you can either opt for a fixed contract or a variable share contract. With a fixed share contract, the percentage you keep and what the provider owns won't change no matter how long you stay in the property or whether it increases in value.
With a variable-share contract, you could receive a bigger tax-free lump sum, but the percentage the equity release provider owns will increase each year, and the percentage you own will decrease. Therefore, the longer you live, the less of your property you will own.
There may be additional costs to consider when setting up a home reversion plan. However, any initial advice or information you receive from our selected advisers is completely free and without obligation. Only if you choose to proceed and your case completes will you pay an advice fee. Other costs you may need to consider are:
- To maintain the property
- Legal fees
- Valuation fees
- An arrangement fee to the lender
- Solicitor fees
The easiest way to find out how much equity you could release is to use our home reversion calculator.
Other equity release plans available
Lifetime mortgage
Drawdown lifetime mortgage
Interest-only lifetime mortgage
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