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A home reversion plan is a type of equity release where you sell all or part of your property to the reversion company in exchange for a cash lump sum, regular income, or both. You and any joint applicant must be a UK homeowner aged 65+ to qualify.
Home reversion plans can be useful for inheritance planning (Key doesn't offer advice on inhertiance tax planning, so make sure you speak to a specialist financial adviser if this is important to you).
Unless you've sold the full value of your home, you’ll know exactly what proportion of your property you’re able to leave as inheritance. On top of this:
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Your share of the property will benefit from any house price increase
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As a home reversion isn't a loan, there are no interest rates - your retained percentage share will never change unless you decide to sell more of your home to the reversion company
We only offer advice on home reversion plans through Key Group.
As an expert equity release adviser, we think it's important to help customers understand all their options when it comes to releasing equity from their home. As a part of our advice process, we’ll consider whether other options may be suitable and can arrange advice on these if appropriate through our wider group.
If you go ahead, you'll only be charged the same £1,299 advice fee you'd pay with us, even if their fee is usually higher.
A home reversion plan involves you selling all or part of your home to a reversion company for lower than market value. The home reversion provider takes legal ownership of your property, but you remain as beneficial owner of your home with a guaranteed lifetime lease.
There's no interest to pay on the money released and no monthly payments to make. The home reversion plan comes to an end typically when the last remaining applicant passes away or moves into long term care. The home reversion provider then takes its percentage share of the sale proceeds.
You don't receive full market value for the portion of the property you sell with a home reversion plan because the buyer (the home reversion company):
An example of how a home reversion works
| Laura's home is worth | £200,000 |
| She sells 50% to home reversion company for | £50,000 |
| After she passes away, her home's sold for | £300,000 |
| The home reversion provider's 50% is worth | £150,000 |
| The remaining value left to Laura's estate is worth | £150,000 |
ⓘ Your property value may decrease. This would impact the remaining value to be left to your estate if you go ahead with a home reversion plan.
Back to "What's in this guide?"
We understand it’s important you have all the information you need about equity release to make an informed decision in your own time.
Home reversion benefits
Some of the benefits of a home reversion include:
Home reversion drawbacks
Some of the drawbacks of a home reversion include:
It's important you're clear on the terms and set up costs of your home reversion plan. To complete the equity release process, you'll need to instruct a solicitor to act on your behalf. Your solicitor will make sure you're aware of all this information before you agree to go ahead with a home reversion plan.
Depending on the provider you're recommended, here are some of the costs you may expect to pay if you go ahead with a home reversion plan:
Make sure you're aware of some of your other options before you agree to go ahead with a home reversion plan.
Is a home reversion plan right for me?
A home reversion plan is a type of equity release which could help UK homeowners take control of their finances. There are other options available which you should also consider to understand if a home reversion plan is right for you.
Explore all your options and see if Key could help you put the life in later life. Request your free, comprehensive guide today.
If you're considering your later life finance options, it's important you get specialist advice to make sure you find the right product for your needs. So why should you choose Key as your adviser?
We're regulated experts
Key is regulated and a proud member of the Equity Release Council
Trusted award-winners
We've had 17,000+ excellent Trustpilot reviews and won 80+ awards, including Best Later Life Broker 2022
When it comes to releasing equity from your home, we understand that you may have questions too. To help, we've provided some answers to home reversion questions. If you're still unable to find the information you need, we're just a phone call away.
The amount you could release with a home reversion plan depends on a few factors. This includes your property value, the percentage of your property sold, your age, and, with some plans, your health.
The amount available is dependent on the age of the youngest applicant.
A home reversion plan is one type of equity release. Another type is a lifetime mortgage - a loan secured against your home.
A lifetime mortgage lets you access some of the tax-free cash tied up in the value of your home while retaining full ownership. It’s a loan secured against your property, and to be eligible, you need to be aged 55 or over and your property needs to be worth at least £70,000. This is a lifetime commitment, so it's important you check the benefits and drawbacks of a lifetime mortgage before you go ahead.
| Product | Home reversion | Lifetime mortgage |
| Minimum age | 65 | 55 |
| Minimum property value | N/A | £70,000 |
| Access tax-free funds | ✓ | ✓ |
| Loan secured against your home | × | ✓ |
| Pay interest on the funds released | × | ✓ |
| Still legally own your home | × | ✓ |
ⓘ This is a simple comparison to help you understand the main differences between a home reversion plan and a lifetime mortgage. It's not a comprehensive view, so make sure you discuss this in detail with your equity release adviser.
Before making any decisions about equity release, you need to get expert equity release advice - this is a regulatory requirement to make sure you understand all your options and find a product that's right for you.
Your equity release adviser will explain your options, and outline the benefits and drawbacks of a home reversion, along with your other equity release options. This will help you make an informed choice that's right for you.
You may also have other later life mortgage options to consider, as you can only take out a home reversion plan if you're aged 65+.
With a home reversion plan, you sell a fixed percentage of your property. The percentage you keep will be passed on to your estate.
As property prices go up and down over time, it's difficult to predict the future value of your property when it's sold, as well as what inheritance will be available.
All home reversion plans that meet the Equity Release Council standards guarantee lifetime tenancy in your property and can be transferred to a new property. This is subject to the approval of the plan provider.
In return, you must maintain your home to a good standard and follow the terms of the home reversion agreement.
Page last updated: Monday 16 December 2024