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What is a home reversion plan?

A Home Reversion Plan allows you to sell a share of your property (or all of it) to a Reversion Company or an individual in exchange for a lump sum, a regular monthly income, or a combination of both. 

Some Home Reversion Schemes will offer to reinvest the cash lump sum for you in order for you to receive a regular income, or you could do this yourself.

Due to their nature, the older you are when you apply for a Home Reversion Plan, the higher the percentage you will receive.  The minimum age for qualification for a Home Reversion Plan is usually higher than that of a Lifetime Mortgage.

You will no longer own all or part of your home but can continue to live in your property for the rest of your life as a tenant.  This would usually be established under a formal lease agreement.

It is usual with most Plans that you do not have to pay rent or if you do, it is only a minimal amount.  Some Plans, however, will allow you to pay a rent in return to receiving more money from the sale. 

Home Reversion Schemes will usually offer less than the full market value of your home. This is typically somewhere between 20% and 60% of its value.  The reason for this is that the buyer cannot re-sell the property until you die or move out.

The Reversion Company would then sell the property in the event of your death or if you moved out, possibly into Long Term Care, for example and receive the proceeds as a result.  If you continued to own a percentage of your property as part of the Home Reversion Plan, you would receive your part of the sale proceeds or they would be paid to your estate (beneficiaries) as appropriate.

Once the Home Reversion Plan starts, the buyer of your home benefits from any rise in the value of the part you have kept.


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