Home Reversion Schemes

With Home Reversion Schemes you are provided with a lump sum or income in exchange for your selling part or all of your property to the Home Reversion company. You will retain the right to live in your property until you die, sell or vacate the property to go into long term care. All the time you occupy the property, you will generally be responsible for its maintenance, upkeep and maintaining adequate buildings insurance.

What makes Home Reversion attractive to clients is that you will be offered a larger lump sum or income than that provided by a Lifetime Mortgage. In addition, if you are in poor health still greater sums can be released. Many Home Reversion providers will offer enhanced terms to individuals who a likely to have a shortened life expectancy due to ill health. 

As Home Reversion requires the actual sale of part or all of your property, the additional amounts released come at a price. You will be waiving all rights to some or all of the future increase in the value of your home in exchange for a greater initial lump sum/income. 

The Home Reversion providers make their profit in two ways, 

  • As they have bought a part or all of your property, they have acquired the right to any increase in the value of their share as a result of house prices increasing.
  • Secondly as they have granted you the right to remain in the property, they cannot simply sell up when they want to. For this reason a Home Reversion provider will buy a share of your house at less than market value. Depending on age, sex and health they will typically pay between 35%-60% of your property's market value.

It is this buying at a discount and entitlement to some or all of the future increase in equity in the property without the burden of maintaining the property, which makes these schemes attractive to providers.

There is no doubting this product meets certain clients needs. Those who do not expect to move home, are in poor health and have no desire to leave the property to their family all may consider this scheme a viable solution.

We have found, however, the loss of ownership deters most applicants and for this reason we do not currently offer Home Reversion equity release schemes.

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