Home reversion is one of the original forms of equity release in the UK. It allows homeowners aged 65 and over to access capital from their property without taking on debt or interest. Instead, you sell part or all of your home to a specialist provider in exchange for a tax-free lump sum. You retain the right to live there for the rest of your life.
Although less common than lifetime mortgages, home reversion may suit those who value long-term certainty, do not wish to borrow against their property, and are comfortable with surrendering full ownership.
A home reversion plan is a property sale arrangement rather than a loan. You agree to sell a share of your home to a provider, who gives you a lump sum or regular income in return. You are granted a lifetime lease, which allows you to live in the home for life, rent-free or at a nominal rent.
At the end of the plan, typically when you pass away or move into long-term care, the home is sold. The proceeds are divided between your estate and the provider based on the ownership shares agreed at the outset.
| Feature | Details |
|---|---|
| Minimum Age | Property sale arrangement, not a loan |
| Tax-Free Cash | Lump sum or regular income, depending on structure |
| Right to Reside | Guaranteed for life through a lifetime lease |
| Renovation projects or unmet mortgage lending criteria | In most cases the property must be ready to live in or rent out |
| Interest or Repayments | Not required |
| Inheritance Protection | Yes, if a share of the property is retained by you |
| Health Impact | Applicants with certain health conditions may access higher release values |
Because the provider waits to realise their share in the future, the amount you receive upfront is typically below the full market value of your home.
To qualify for a home reversion plan in the UK, you generally need to:
Applicants who are older or who have specific health conditions may be able to access a greater share of their property’s value.
The amount you receive is influenced by:
Some providers may offer up to 60 percent of a home’s value to clients in their 80s, though this remains significantly discounted from full market value.
Use the Equity Release Calculator for an indication of your borrowing power.
Advantages of Home Reversion
| Feature | Home Reversion | Lifetime Mortgage |
|---|---|---|
| Product Type | Sale of all or part of the property | Loan secured against property |
| Ownership | Full or shared transfer to the provider | Full ownership retained |
| Interest | Not applicable | Interest accrues over time unless repaid |
| Repayment | Not required | Repaid on death or entry into care |
| Inheritance Impact | Estate reduced from the outset | The estate is reduced over time as interest accumulates |
| Flexibility | Fixed ownership share and cannot be reversed | Greater flexibility with options for voluntary repayments |
This structure may be appropriate if you:
Myth: You lose your home entirely.
Fact: You surrender ownership but retain the legal right to live there for life through a lease.
Myth: You will receive full market value for the share sold.
Fact: The lump sum is discounted, as the provider must wait to realise value from the property.
Myth: Home reversion is unregulated.
Fact: These plans are regulated by the Financial Conduct Authority, and most providers follow Equity Release Council standards.
Home reversion plans have been available in the UK since 1965 and were initially introduced by Hodge Bank. They are now regulated by the Financial Conduct Authority and must meet strict legal and compliance requirements. These include:
Home reversion can offer a clear and stable solution for some homeowners seeking capital in later life. However, the irreversible nature of the arrangement and the immediate impact on your estate require careful consideration.
Speak with a regulated adviser to explore whether this route is right for you or whether other forms of later life lending may better support your goals.