Home Reversion Plans

Home reversion plans are one of the longest-established types of equity release in the UK, but they have become far less common over time. This is largely because most homeowners considering equity release today find that a lifetime mortgage typically provides a more flexible alternative.

In this guide, we’ll explain what a home reversion plan is, whether they are still available, how they compare with lifetime mortgages, and what options you may have if you already have one in place.

What is a home reversion plan?

A straightforward way to describe a home reversion plan is that it’s a type of equity release where you sell part or all of your home to a provider in return for a tax-free lump sum, while keeping the right to live in the property rent-free for the rest of your life.

However, unlike a lifetime mortgage, you do not continue to fully own your home. The provider becomes a part-owner (or the full owner). When the property is eventually sold — usually after you die or you move into long-term care — the provider receives its agreed share of the sale proceeds.

The lump sum you receive is normally much lower than the property’s market value. This is because the provider is taking a long-term risk, won’t receive interest payments from you, and may have to wait many years before it can realise its investment.

Can you still get one in the UK?

In most cases, no. While it may still be technically possible through one or two lesser-known options, most major and specialist equity release providers left the home reversion market years ago. This was largely due to low demand, the complexity of these plans, and poorer outcomes for borrowers compared with lifetime mortgages.

For most homeowners, a modern lifetime mortgage is now the more practical and often more beneficial option than a home reversion plan, particularly if you want better value and more flexibility when releasing equity from your property.

Home reversion plan vs. lifetime mortgage

Below is an overview of the differences between a home reversion plan versus a lifetime mortgage for releasing equity.

While home reversion plans avoid interest altogether, the trade-off for this upfront benefit is often far worse when you run the numbers. Giving up ownership and selling your home at a steep discount usually results in less money in your pocket.

How to choose the right equity release plan

Selecting the most suitable equity release option should be done with careful, regulated advice — particularly if you are weighing older products such as home reversion plans against modern lifetime mortgages.

A specialist equity release adviser can:

• Assess whether equity release is your most suitable option

• Compare lifetime mortgage products across the whole market

• Explain how features such as the no negative equity guarantee and inheritance protection work

• Show how flexible repayment options can help reduce long-term costs

• Explore alternative ways to release equity or access funds

In almost all cases, if you are considering a home reversion plan, it is sensible to review lifetime mortgage options first with an experienced adviser.

Home reversion plan pros and cons

Advantages

• No interest is charged on the equity you release

• Certainty over the percentage of the property you sell

• Guaranteed right to live in your home for life (rent-free), provided you meet the plan terms

Disadvantages

• You sell your home at a significant discount to its market value

• You lose full ownership, as the provider becomes a part-owner (or full owner)

• Inheritance is likely to be severely reduced

• Very limited flexibility once the plan is in place

• Only one or two providers may offer this type of plan

• Difficult to undo, change, or exit later on

• Rarely suitable or cost-effective compared with alternative equity release options

Examples of what to do if you have a home reversion plan

If you already have a home reversion plan, you are not necessarily locked into it forever — but what you can do next will depend on your provider and the specific terms of your agreement. With expert advice, possible routes to explore include:

• Reviewing your plan to understand how it is likely to affect you over the long term, including the true overall cost

• Buying back equity, where the provider allows it and it is affordable

• Switching to a lifetime mortgage, if this is possible and suitable for your circumstances

• Downsizing, if it fits your needs and your plan terms allow a move

• Estate planning, to help manage inheritance expectations and reduce surprises for family members

A specialist equity release adviser can review your current arrangement and explain whether a modern lifetime mortgage could improve your position, or whether other strategies may be more appropriate.

Home reversion plan providers

Most recognisable equity release providers no longer offer home reversion plans. However, a small number of niche firms — such as Crown Equity Release and Bridgewater Equity Release — may still be able to arrange them.

Several big-name equity release brands that have exited the home reversion market include:

• Aviva

• Legal & General

• Canada Life

• LV=

These providers now concentrate almost entirely on lifetime mortgages, reflecting a wider shift in the market towards products that typically deliver stronger consumer outcomes.

If you are researching UK home reversion plans today, it is usually because you want equity release — and in nearly all cases, a lifetime mortgage will be the more suitable option.

Frequently Asked Questions