Are Equity Release Plans Available for All Types of Property?

The most common types of property will generally be accepted by the majority of lenders, so long as it is your main home, but of course there are exceptions.

Both the value and type of property helps to determine whether you are able to release equity from your home under an equity release plan and how much money will be made available to you. A well looked after property wouldn’t normally fail to be approved, but even if your home needs some updating or basic maintenance, lenders will still often consider an application. They may offer to release equity for you, but could state that certain work is carried out as a condition of the plan.

How is the Decision Made?

Generally speaking, the equity release lender will consider a number of factors relating to a property;

  • The type of property
  • The construction method and materials used
  • The property’s location
  • The property’s value
  • The condition of the property
  • Use of the property

Once an application has been submitted, the lender will appoint a valuer who will conduct an independent valuation of your home. The valuer will send a report to the lender stating their valuation figure for your home and will comment on whether or not it meets the lender’s criteria. If your property is accepted, the lender will then issue a formal offer for your consideration before you decide to accept it and release the equity.

Properties Commonly Accepted

Many of the most commonly owned properties are appropriate for equity release products. These include:

  • Houses: detached / semi⁠-⁠detached / terraced
  • Bungalows
  • Flats

Properties Typically Rejected

There are a number of property types which are unacceptable to lenders when approached to release equity. These will include:

  • Static park homes / mobile homes
  • Studio and basement flats
  • Property used or partly used for commercial purposes, such as Hotels, B&Bs, Buy⁠-⁠To⁠-⁠let, and Farms restricted to agricultural use.
  • Houseboats
  • Shared Ownership housing
  • Retirement / Sheltered Housing (still worth checking with a qualified equity release adviser as some lenders may consider this type of property)

Additionally, many lenders will not release equity on properties valued lower than £60,000.

Whilst this guide can help you determine the likelihood of successfully releasing equity from your home, lenders may be willing to judge every case on its individual merits. If the lender believes the property represents suitable security, they may be willing to consider it.

Equity release may involve a home reversion plan or lifetime mortgage which is secured against your property and will reduce the value of your estate and impact funding long⁠-⁠term care. To understand the features and risks ask for a personalised illustration.

If you are interested in releasing equity, please contact the Age Partnership team on 08080 555 222 and they will discuss all the options, including what impact it could have on the size of your estate over time and if your entitlement to current and future means⁠-⁠tested benefits may be affected.

We provide initial advice for free and without obligation. Only if your case completes would our advice fee of £1,895 be payable. Other lender and solicitor fees may apply.