Thinking About Releasing Equity? Home Reversion Could Be an Option

If you’re over 60 and own your home, you may be wondering whether there’s a way to access some of the money tied up in it — without having to sell up or move. One route that doesn’t get talked about as often, but can be right for some people, is a home reversion plan.

Unlike other types of equity release, a home reversion plan isn’t a loan. Instead, it gives you the chance to sell a portion — or all — of your home to a specialist provider in exchange for a tax-free lump sum (or regular payments), all while continuing to live in your property rent-free for life.

Let’s explore how it works, who it’s for, and why — in certain situations — it could be a better fit than the more widely used lifetime mortgage.

Home reversion is a simple concept with long-term implications. Here’s what happens in a typical arrangement:

• You sell a share (or the whole) of your home to a reversion company.
• In return, you receive a tax-free cash payment — either as a lump sum, regular income, or both.
• You get a lifetime lease, which means you can stay in your home for the rest of your life rent-free.
• When your home is eventually sold (after you pass away or move into long-term care), the reversion provider receives their agreed share of the sale proceeds.

What makes this different from other equity release options is that you’re not borrowing money — so there’s no interest to pay and no debt to manage. But it also means giving up full ownership of your home, so it’s a big decision and one to consider carefully.

You might be more familiar with lifetime mortgages — the more common form of equity release — where you borrow against your home’s value and repay the loan (plus interest) when your home is sold.

With home reversion, there are no repayments, no rolled-up interest, and no mounting debt. But you are selling a stake in your home, and you won’t receive its full market value for the share you sell. Most providers will offer between 30% and 60% of market value, depending on your age and health.

Why the discount? Because the provider won’t earn any rental income from you, doesn’t know how long you’ll remain in the property, and can’t predict how the housing market will perform in future.

In other words, you get access to funds now, and they wait to receive their share when your home is eventually sold.

It’s not for everyone — and it’s used far less frequently than lifetime mortgages — but in some cases, it could unlock more cash than a loan-based equity release plan.

Home reversion might appeal to you if:

• You’re over 70 and want to release as much as possible from your property
• You don’t want the debt or compound interest that comes with a loan
• You’re not looking to downsize or move
• You’re happy with the idea of giving up part of your property’s value
• You want to guarantee an inheritance by keeping a percentage of the home in your name

If you only sell part of your property, the unsold share will go to your estate — so your loved ones can still benefit from any future rise in house prices on that remaining share.

Every provider has slightly different rules, but most require that you:

• Are aged 60 or older
• Own a home in the UK worth at least £100,000
• Are in good enough health to remain in the property long term
• Understand and accept that you’re giving up legal ownership (either fully or in part)

Because of the way reversion plans are structured, they usually make more financial sense the older you are. People aged 70 or over tend to get a much higher percentage of their home’s market value than those in their early 60s.

The amount you’ll receive depends on several factors, including:

• Your age (older applicants typically release more)
• The percentage of the property you sell
• Your health and lifestyle
• Your home’s market value and condition

As a rough guide, most home reversion companies will offer between 30% and 60% of your home’s market value for the share you choose to sell.

So, if your property is worth £300,000 and you sell a 50% share, you might receive around £45,000 to £90,000 — depending on your personal circumstances and the provider’s offer.

Let’s say a couple in their 70s wants to stay in their family home, but they need additional retirement income. They decide to sell 75% of their home through a home reversion plan and receive a tax-free lump sum in return. They still live there rent-free for life.

When the property is eventually sold, the reversion provider takes 75% of the sale proceeds — and their family receives the remaining 25%, preserving part of their estate as an inheritance.

Like any financial decision, home reversion plans come with trade-offs. Some key risks and considerations include:

• You’re selling part (or all) of your home, so you’ll no longer fully own it.
• The cash you receive is below market value, which can feel like a large discount upfront.
• If you pass away soon after taking out the plan, your family may lose significant value from the estate.
• If you decide to buy back the sold portion later, you’ll have to pay the full market value — not the price you sold it for.
• A large cash lump sum could affect your eligibility for means-tested benefits like pension credit or council tax reduction.
• Reversion plans can be difficult to reverse, so they require careful thought and advice.

For all these reasons, it’s crucial to speak with an expert before making any commitments.

Yes. Home reversion plans are regulated by the Financial Conduct Authority (FCA). Any provider offering these products must follow FCA rules and meet strict standards to ensure you receive fair treatment and understand your choices.

Providers should also be members of the Equity Release Council, a voluntary body that promotes transparency, customer protection, and ethical conduct. If you work with an adviser who’s a Council member, they’ll help ensure the plan is right for you and walk you through it step by step.

Initial advice is typically free and without obligation. You’ll only pay an advice fee if you choose to go ahead and the plan completes.

Other possible costs include:

• Property valuation
• Legal and solicitor fees
• Application or arrangement fees

You’ll also remain responsible for maintaining your home — after all, it will eventually be sold to recover the provider’s share.

A good adviser will explain all charges clearly so you know exactly what to expect before moving forward.

Yes — reversion plans are available to homeowners in England, Scotland, Wales, and Northern Ireland.

While fewer people choose this option compared to lifetime mortgages, it’s still a regulated and legitimate form of equity release that may suit your situation.

Home reversion won’t be right for everyone — but in the right circumstances, it offers something unique. It gives you the chance to access tax-free money, continue living in your home, and do so without taking on any debt.

It’s especially worth exploring if you’re:

• Over 70
• Looking to maximise the cash from your home
• Comfortable giving up full ownership
• Keen to avoid interest or monthly payments

The key, as always, is to get tailored advice. A qualified equity release adviser can talk you through all your options — including whether a home reversion or a lifetime mortgage is better suited to your needs.

Equity release can be helpful, but it’s not the best fit for everyone. If the amount you’re able to release falls short of what you need, there are other routes worth exploring:

• Downsizing – Selling your home and moving somewhere smaller could free up the extra funds you’re looking for.

• Retirement Interest-Only (RIO) Mortgage – This lets you borrow against your home while only paying the interest, so your debt doesn’t grow over time.

• Pension Annuity – If a steady income is what you’re after, an annuity could be an alternative. It turns your pension savings into a guaranteed income for life.

Not sure which option is right for you? A qualified adviser can talk you through the pros and cons of each, helping you find the approach that fits your plans and priorities.