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Equity Release
A home reversion plan lets you sell all or part of your home for a tax-free lump sum while keeping a guaranteed lifetime tenancy. Very few providers still offer it, and for most people a lifetime mortgage turns out to be the more competitive option - this guide explains the difference so you can work out which fits your circumstances.
A home reversion plan is a type of equity release where you sell all or part of your home to a provider in exchange for a tax-free lump sum, while keeping a legally guaranteed right to live there rent-free for the rest of your life. Unlike a lifetime mortgage, you're not borrowing against your home - you're selling a share of it, usually at well below its full market value.
For most people under 70, a lifetime mortgage tends to be the more flexible and widely available option. Home reversion can suit older homeowners who want certainty over exactly how much of their estate is committed, and who are comfortable giving up ownership of part of their home in exchange for that certainty.
An equity release home reversion plan lets you sell all or part of your home to a provider in exchange for a tax-free cash lump sum, while keeping a guaranteed legal right to live in the property rent-free for the rest of your life.
Unlike a lifetime mortgage, a home reversion plan isn't a loan. There's no interest to accrue and nothing to repay - because you've sold a share of the property outright, ownership of that share transfers to the provider straight away. You keep a lifetime tenancy, so you can carry on living in your home for as long as you choose, even though you no longer own all of it.
The minimum age for a home reversion plan is typically 65 (some providers accept 60), which is higher than the age 55 minimum common for lifetime mortgages. It's also worth knowing upfront: very few providers in the UK currently offer home reversion plans. The market has contracted significantly over the past decade, and most equity release customers now choose a lifetime mortgage instead.
When you take out a home reversion plan, you sell an agreed percentage of your home to the provider. The provider pays you a lump sum based on that percentage of the property's current market value - discounted, because the provider won't receive their share of the eventual sale proceeds until you die or move into long-term care, potentially decades later.
This example is illustrative only - actual offers vary by provider, age, property type, and location. Before any home reversion plan can complete, you're legally required to take independent legal advice from a solicitor who isn't connected to the provider or your equity release advisor. This isn't a bureaucratic formality - it's a core consumer protection built into Financial Conduct Authority regulation, designed to make sure you fully understand what you're agreeing to before you sign anything.
How it works
Get independent advice
Speak to a Financial Conduct Authority-regulated advisor about whether home reversion suits your circumstances, and compare it against a lifetime mortgage before deciding.
Choose your percentage
Decide how much of your home to sell. Depending on the provider, you can typically sell anywhere from around 20% up to 100%.
Receive your offer
The provider values your property and offers a lump sum based on the percentage you're selling and your age (or the age of the youngest joint applicant).
Get independent legal advice
The Financial Conduct Authority requires you to take independent legal advice from a solicitor before completion. This is mandatory, not optional.
Completion
Once you accept and legal checks are complete, the plan completes and you receive your tax-free lump sum - typically 6-12 weeks after your initial enquiry.
Home reversion plans and lifetime mortgages are the two main types of equity release available in the UK, and they work in fundamentally different ways. The table below compares them side by side.
In practice, a lifetime mortgage suits most people better once you factor in the wider provider choice and the fact that you keep full ownership of your home. An equity release home reversion plan can still make sense if you're older (typically 70 or over), want complete certainty over exactly how much of your estate is committed rather than a growing interest balance, or if your property type makes a lifetime mortgage harder to arrange.
Because there's no borrowing involved, a home reversion plan doesn't carry the same repossession risk as a mortgage. Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it - one reason some people who want to avoid that risk entirely consider a home reversion plan instead. That said, you're still giving up outright ownership of part of your home, and it isn't a decision to take lightly.
Compare your options
Our equity release advisors compare a wide range of providers, including the small number who still offer home reversion plans, to help you see which option fits your circumstances.
Like any equity release scheme, a home reversion plan comes with genuine benefits and real trade-offs. Every advantage below has a caveat worth weighing up - we've set those out in the disadvantages list underneath.
Ring-fencing sounds like a small detail, but it makes a real difference to what your family receives. On a £350,000 home, protecting 30% for inheritance means your beneficiaries would be guaranteed at least £105,000 from that share, regardless of how much of the rest of the property you sell. The trade-off is a smaller lump sum for you today - it's a genuine balance to work through with an advisor, not just a box to tick.
If giving up ownership of any part of your home doesn't sit right with you, it's worth discussing a remortgage as an alternative with an advisor, alongside other options like downsizing - though a remortgage depends on your income being sufficient to support new borrowing later in life.
Eligibility for a home reversion plan is stricter on age than a lifetime mortgage, but broadly similar on the other criteria. Here's what most providers look for:
If you're applying jointly with a partner, both of you need to meet the minimum age requirement - the provider bases pricing on the age of the youngest applicant, since that determines how long they're likely to hold the property before it's eventually sold.
Eligibility checklist
The amount you receive from a home reversion plan is calculated as a percentage of your property's market value for the share you sell, and that percentage typically ranges from around 20% to 60% depending mainly on your age. The percentage is lower for younger applicants because the provider expects to wait longer before they can sell the property and recover their investment; it rises as you get older because the provider's expected wait is shorter.
These figures are indicative only - your actual offer depends on the provider, your property type and location, and in some cases your health. An equity release calculator can give you a rough indicative figure before you speak to an advisor, though only a full application will confirm what's actually available to you.
Yes, potentially. Receiving a lump sum from a home reversion plan can affect your entitlement to means-tested benefits such as Pension Credit and Council Tax Reduction, since the cash you receive counts towards your savings and capital for assessment purposes. If you deliberately reduce your savings shortly after releasing equity in order to qualify for benefits, this can also trigger the 'deprivation of assets' rule, which allows the assessment to treat you as if you still held the money. Speak to a benefits advisor - or contact MoneyHelper on 0800 138 7777 - before proceeding, especially if you currently receive or expect to claim means-tested support.
Selling a share of your home through a home reversion plan can reduce your estate's value for Inheritance Tax purposes, because the sold share is no longer legally part of your estate when you die. Any percentage you retain, or ring-fence for inheritance, remains part of your estate and is assessed in the usual way. The interaction between equity release and Inheritance Tax is genuinely complex and depends on your total estate value, so it's worth reading our dedicated guide to equity release inheritance tax alongside getting personalised advice.
Financial Conduct Authority rules require you to take independent legal advice from a solicitor before a home reversion plan can complete. This isn't optional, and it isn't just a formality - it's a core consumer protection that makes sure someone independent of the provider and your advisor has checked you understand exactly what you're agreeing to. Typical solicitor fees for this advice fall in the region of £300 to £600, though this varies by firm.
We compare a wide range of equity release providers to find the right fit for your circumstances.
Because so few providers currently offer home reversion plans, choosing the right one - and getting proper equity release advice beforehand - matters more than ever. As a Financial Conduct Authority-regulated broker, we compare a wide range of equity release providers on your behalf, including specialists who still offer home reversion plans. Here's what to check before you commit:
Provider checklist
Equity Release Council membership
This is non-negotiable. Equity Release Council members guarantee a lifetime tenancy, a no-negative-equity guarantee on lifetime mortgages, and the right to move home subject to conditions. Never proceed with a non-member provider.
Financial Conduct Authority authorisation
Check that the provider and your advisor are both listed on the Financial Services Register. Equity release is a regulated activity, and using an unauthorised firm removes your regulatory protections.
Fee transparency
Ask upfront whether there's an advice fee, what it covers, and when it's payable. Some advisors charge a fee only on completion; others charge regardless of outcome.
Independent advice
An advisor tied to a single provider can only offer you their own products. An independent advisor can compare offers across the providers who remain active in the market.
Access to a wide range of providers
With so few home reversion providers left, working with a broker who compares across a wide range of the market - rather than relying on a single company's offer - gives you a far better sense of whether the deal in front of you is competitive.
Free, independent guidance from regulated organisations and industry bodies.
Free, impartial money guidance backed by the government, including a dedicated section on equity release.
The industry body setting standards for equity release providers, including the lifetime tenancy and no-negative-equity guarantees.
Verify that a firm or advisor is authorised to give equity release advice.
Common questions
It depends on your circumstances. A home reversion plan can suit older homeowners (typically 70+) who want certainty over exactly how much of their estate is committed, rather than a lifetime mortgage's growing interest balance. But it isn't always the best option - lifetime mortgages are far more widely available, and most people find them more competitive. Speak to an advisor to compare both properly before deciding.
Yes. Most home reversion providers let you ring-fence a percentage of your property - for example, 20% - so that portion is guaranteed to pass to your beneficiaries regardless of when you die or move into care. The trade-off is that ring-fencing reduces the lump sum you receive, since the provider is committing to protect that share rather than buying it.
The plan doesn't end automatically, but if you move into permanent long-term care, the property is usually sold. The provider receives their agreed share of the sale proceeds, and your estate - or your remaining partner, if you applied jointly and they still live there - receives whatever share you retained.
Yes. Home reversion plans are a form of equity release, which is a regulated activity. Both the provider and your advisor must be authorised by the Financial Conduct Authority. You can check this yourself by searching the Financial Services Register before you proceed with any provider.
Very few. The home reversion market has contracted significantly over the past decade, and most UK equity release customers now choose a lifetime mortgage instead, simply because more providers offer them. With so few home reversion providers left, working with a broker who compares across a wide range of the market matters more than usual.
Yes, but only within a limited window. Home reversion plans come with a statutory cooling-off period, typically 30 days, during which you can cancel without penalty. After that period ends, reversing or cancelling a home reversion plan is difficult and can be costly, since it usually involves buying back the share you sold at its current market value.
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Equity Release
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