Home reversion plans enable you to sell a part or share of your home in exchange for a lump sum.
When you die or move into long term care your home is then sold and you or your estate receive back your share of the sale proceeds, less any fees such as solicitor's fees that have arisen as a result of the sale.
For example, if you sold 30% of your property to the reversion company, on the sale of your home they would receive 30% of the proceeds, including any growth in its value.
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Risks |
You have no repayments to make – instead the money you receive is repaid on the sale of your home
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You will usually be selling a part of your home at a discount to its current market value because the home reversion company allows you to continue living in your home and can't sell it until you die or move into long term care
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You know from the outset the share of your home you retain for your estate
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A home reversion plan is a lifelong commitment and if you decide to buy back your share of your home you will need to do so at the current market value
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You continue to benefit from any house price increases on the share of the property you still own
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It will reduce the remaining equity you have by the share of your property that you sold and you won't benefit from any increase in property value for the share that is owned by the home reversion company |
| You won't suffer from any decrease in property value for the share of your home that is owned by the home reversion company |
You effectively become a tenant in your own home, although you are still liable for its maintenance and upkeep
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| You continue to live in your home rent-free |
If you die shortly after taking out the plan, you will have effectively sold a share of your home very cheaply (some providers do offer protection against this with an early death clause)
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If you have any medical or lifestyle conditions which affect your health, you may receive more
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Charges may apply for valuation and solicitor's fees, and for admin fees |
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Taking out a home reversion plan could affect the amount of means tested benefits you receive |
This is a home reversion plan, to understand the features and risks, ask for a personalised illustration.
Useful linksOur equity release calculator
Our advice service
Films about equity release