Home Reversion Plans
Home Reversion Plans
A home reversion plan means that you sell some or all of your property to the home reversion plan provider.
How They Work
You generally need to be 60 years old or over to qualify for a home reversion plan.
You can stay in the property rent free or you may be asked to pay a modest peppercorn rent (usually around £5 per month). Your property will typically pass to the home reversion plan provider on your death.
Home reversion plan providers purchase some or all of your property in return for a cash lump sum. They will own (or part own) the property, but you are granted a lifetime lease, which gives you the security to live in your home, rent-free or on a peppercorn rent, until you die or go into long term care.
Part Selling
If you sell 50% of your property for example, when you die or leave the property, 50% of its value at the time of death or leaving the property will go to the provider and 50% to your beneficiaries so the provider benefits from the increase in the equity of the property.
If you do not sell your entire home initially, it may be possible to sell further shares in it and receive further lump sums in the future.
The amount that you receive will depend on your age. The younger you are, the longer you are likely to live in your home rent-free, so this will reduce the cash lump sum that will be offered so selling 50% of your £200,000 home would net you approximately £60,000.
No Interest Payments
Home reversion plans are different to lifetime mortgages and because they are not loans they do not attract any interest.
However, they are not short term commitments and are not suitable for those wishing to buy back all or a share of their property during the term of the plan.
Home Reversion Plans represent less than 1% of the equity release market so we do not offer advice on Home Reversion Plans but if required we will refer you to an adviser with the appropriate FCA permissions.
