Home Reversion Plan

Introduction

A home reversion plan allows you to unlock tax-free cash from your home by selling a portion—or even all—of its value to a reversion company. In return, you get a guaranteed lifetime lease, allowing you to stay in your home for as long as you wish, either rent-free or by paying a small nominal rent.

One of the key advantages of a reversion plan is that you can preserve a share of your property’s value to leave as an inheritance. If your property increases in value over time, both you and the reversion company share the benefits—provided you haven’t sold 100% of your home.

The Advantages

• No monthly repayments: No need to worry about meeting any regular payment commitments.
• Fixed equity share: You know from the start exactly what proportion of your home is being sold.
• Inheritance protection: Guarantee a set percentage of your home’s value for your beneficiaries.
• Flexible options: Release only the cash you need now, with the potential for additional releases in the future.
• Value growth benefits: Retain the benefit of any increase in value on the portion of the property you still own.
• Higher release amounts: Typically, you can unlock more money at a younger age compared to a lifetime mortgage.
• Freedom to move: Most plans allow you to move to a new home, subject to certain conditions.

Things to Keep in Mind

While home reversion plans can be a powerful financial tool, there are some considerations:

• Reduced market value payout: You won’t receive the full market value for the share of your home you sell. This reflects the provider’s delayed return on their investment, as they won’t benefit until your home is sold.
• Limited value growth: You’ll only gain from property value increases on the portion you still own.
• Irreversible decisions: Selling part of your home under a reversion plan cannot typically be undone.
• Provider gains: The reversion company benefits from property value increases on their share.
• No guaranteed further advances: Unlike other equity release options, additional cash releases may not be guaranteed.
• Early exit charges: Exiting the plan early may incur costs.
• Impact on finances: Your tax position and eligibility for means-tested benefits may change.

Tailored Advice for Informed Decisions

A home reversion plan can be an excellent option for some homeowners, offering the chance to unlock more funds at a younger age while securing a lifetime lease. However, it’s not a one-size-fits-all solution.

That’s why our expert advisers are here to guide you through every step, helping you weigh the benefits and drawbacks and make the right choice for your future.

Ready to explore if a home reversion plan is right for you? Let’s talk about how to unlock the value in your home.