A Home Reversion Plan is a type of equity release scheme that allows homeowners, usually aged 55 or above, to sell all or part of their home to a reversion company in exchange for a lump sum of money or regular payments.
Unlike a lifetime mortgage, you no longer own the portion of the property you sell, instead, the reversion company becomes a co-owner.
However, you can continue living in your home rent-free for the rest of your life or until you move into long-term care. When the property is eventually sold, the reversion company receives its share of the sale proceeds, based on the percentage of ownership it holds.
For example, if you sell 50% of your home under a Home Reversion Plan, the provider will get 50% of the sale value when the property is sold, regardless of how much the house price has changed.
The amount you receive upfront is usually less than the market value of the portion sold because the provider must wait until the property is sold to recover their investment. This plan can be a useful way to access funds in retirement, but it also reduces the inheritance you leave behind.