Home Reversion Plan

With a home reversion plan, you exchange the ownership of some or all of your home for a lump sum of cash, and the right to remain in the property, free of charge, for as long as you live (also known as a lifetime lease). Because you are able to continue living in your home, rent-free, for life, you would generally receive a fee for your property that is lower than it's market value.

An advantage of a reversion plan is that you can choose to surrender only a proportion of your house, thereby guaranteeing that the rest will remain in your estate to pass on to loved ones after your death. Reversion plans are not currently as popular as lifetime mortgages, however, as, although a greater lump sum can generally be released, many people prefer to retain full ownership of their properties. As with all equity release plans, it is important to choose the right plan for you, and we would strongly recommend that you speak to an Age Partnership Equity Release Specialist before making any commitment.

Advantages

• The cash you release is tax free and can be spent on whatever you like
• There are no repayments to make
• You know at the outset what share of your home you will be leaving to loved ones in your estate
• You are able to guarantee an inheritance
• The older you are, the more money you will be able to release
• Plans available from 60
• You can typically raise a larger sum from your home with a reversion plan than would be available with a lifetime mortgage
• You can benefit from any future increase in the value of the proportion of the property that you still own

Disadvantages

• You no longer benefit from any future house price rises on the proportion of the property that you have sold
• Charges may apply should you wish to end the plan early
• Your tax position and eligibility for means-tested benefits may be affected
• The reversion plan provider will buy at a discount to the current market value because they will be giving you the absolute right to live in the property rent free for the rest of your life
• If you pass away soon after taking out the plan, you may have effectively sold some or all of your property on the cheap, although some plans make provisions for this eventuality
• Reversion plans cannot usually be reversed as you are selling part of your home

Common Questions

• How will equity release benefit me?
• What types of equity release are available?