Home Reversion

Since April 2007, home reversion plans have been regulated by the Financial Conduct Authority and now only account for less than 1% of all equity release sales. Despite this, home reversion plans are still an important consideration in the overall decision making process.

Summary

In return for selling part or all of your property to the reversion company, you receive a tax free lump sum or you can opt for a lifetime income.
The home reversion provider then provides you with a lifetime lease, which guarantees residence in the property for the rest of your life.
By selling only a percentage of the property enables you to guarantee an inheritance for your beneficiaries. You are still responsible for the maintenance of the property and the works involved.


Advantages

Plans are available from 65, or if poor health persists, from age 55A guaranteed percentage of the property will pass to your beneficiariesYou will benefit from the increase in value on your share of the propertyThere is no accumulation of interest, hence no growing debtThe older you are, the more cash you can releaseIt raises more money than a lifetime mortgage

Disadvantages

You will no longer completely own your own home If you sell all your property, your estate will not receive any inheritanceYou will not retain any property price escalation on the proportion of the property soldReversion companies are more selective about the properties they release onIf you die shortly after taking out the plan, there could be a disproportionately high loss to your estate

 

Further Information on Home Reversion Plans

Home reversion has a higher starting age than lifetime mortgages with a commncement age of 65 years. These equity release schemes use the age of the youngest person, sex and the valuation of the property as the basis for the caluation of the maximum lump sum. From these results you can then determine how much capital is immediately required.

 

The home reversion companies calculation of its lump sum outlay is based on a discount. The reason for this is due to the fact you will be living in their share of the property for the rest of your life. The basis works on the fact that the younger you are, the lower cash lump sum you will receive.

 

As an example of the discounting involved - a male aged 70 sells 100% of his property value as he has no children and in poor health. Dependent upon the home reversion scheme recommended, he could receive anywhere between 37% to 41% as a tax free lump sum.

 

How Equity Release Supermarket can help?

Before equity release is transacted these day, home reversion advice must be sourced from a qualified equity release adviser. Equity Release Supermarket advisers will provide a free initial meeting, either face-to-face at your own home, or via a telephone consultation. From there they will present their equity release solutions from the range of 3 home reversion companies still available.

 

To book an appointment or find further information on home reversion plans see the following: -

Home Reversion Plans | Calculator | Home Reversion quotes | Contact Us

 

'the complete equity release service'
 
Ask us a question
Request a quote
Select a lender from the following list to request your equity release quote.