A home reversion plan is a type of equity release: you sell your home, or a share of it, for a lump sum or income, then go on living in it for life.

That is the short answer to what a home reversion plan is. It is a sale, not a loan, and it is far less common than its cousin, the lifetime mortgage. Whether a sale suits your home, age and family depends on details that a qualified equity release adviser, authorised by the FCA, can look at; to have one phone you back, free of charge, use this page's short form.

What is a home reversion plan?

In the Equity Release Council's description, a provider buys some or all of your house, pricing in your age and health, and in return you get tax-free cash, as a lump sum or regular payments, plus "a lifetime lease, guaranteeing you the right to stay in your property rent-free for the rest of your life". Whether that cash is taxed is covered in is equity release taxable?

The legal meaning sits in the FCA Handbook glossary, which sets three tests applied when the arrangement is entered into. A reversion provider buys the homeowner's (or trustees') qualifying interest in the land, in whole or in part. The seller, or a related person such as a spouse, is entitled to live in at least 40% of it as a home and intends to. And the arrangement names what ends that right to live there: a move into a care home, death, or the close of a specified period of at least twenty years.

The Council treats lifetime mortgages and home reversion plans as the two main kinds of equity release; equity release types shows the variations and the UK equity release guide explains the whole picture.

How does a home reversion plan work?

You sell a share of the home (or all of it) to a provider, who pays in cash or in instalments, and the price is below what that share would fetch on the open market. MoneyHelper's guide (as archived on 6 December 2025) says the offer is usually only 20% to 60% of what the home is worth on the open market, partly because the company "cannot sell your home until it’s permanently empty".

Age and health matter because the provider is waiting for the home to come to it. Legal & General's guide of 3 March 2026 says someone older or in poor health "might get a better deal". Royal London's guide of 14 June 2026 makes the age point: older applicants might be offered more, since the provider expects the plan to run for a shorter time.

Royal London gives its own illustration, after saying you should expect less than the actual value of the portion you sell: a £300,000 home, 50% sold, £105,000 received. It calls this "an illustrative example and not a guarantee of what you might get", so read it as a picture of below-market pricing, not a figure for any home. How much a home reversion plan pays goes further.

Because it is a sale, Royal London says there is no interest and no debt that grows over time, and the Council says the share you keep stays fixed whatever house prices do, unless you take more cash later. Providers set their own eligibility rules; Royal London describes plans as typically for homeowners aged 60 or over.

The lifetime lease: living in the home after you sell

Once you have sold, you stay on as the provider's tenant for life. Legal & General says it is "like becoming a tenant in a home you used to own", adding that you might even have to pay rent. The Council's description is a rent-free lease, so whether any rent is due depends on the plan in front of you.

The house still needs looking after: Royal London says you are usually responsible for maintaining it and keeping it insured, and under the Council's Standards your solicitor must point out the contract's obligations, including insurance and maintenance. Where the provider is a Council member, you and the provider must have separate lawyers.

For a particular lease, such as what happens if a term is broken or whether a relative can move in, an adviser can talk you through the position at no cost once you fill in the form.

What happens when you die or move into care?

The home is sold and the money is divided by ownership share. On the Council's description, each side takes the slice of the sale price matching the share it owns at the end, so your estate receives the value of the share you kept. Legal & General says the provider takes no money out until the whole property is sold, which usually happens when you die or move into long-term care. Where two of you own the home, Royal London says the plan ends when the last homeowner dies or goes into long-term care.

The sharpest risk is timing. Before completion, the Council's Standards have your solicitor explain that if you die soon after a reversion, you may have had little benefit from the cash while your estate has still lost the share sold. The same explanation covers the chance that state or other benefits are reduced (see equity release and benefits), and how equity release affects inheritance covers what the family receives. If your plans might change, say a move nearer family, raise it with the adviser when the call-back from this page's form comes.

Equity Release Council standards and the right to remain

The Council's Standards (V2.0, May 2025) say "For Home reversion plans only two Product Standards apply": home for life and the option to move. They bind the Council's members, not the law, and a member offering a product that falls short of them must say so clearly in its documents, explaining why and what the risks are.

Home for life. Your right to remain lasts for the rest of your life, or until you move permanently into care, provided the home stays your main residence throughout the plan and its terms and conditions are kept.

Option to move. If you want to move, a member provider must offer you a fresh plan on a suitable alternative home, on terms no worse than it is then offering new customers; it may charge reasonable costs and expenses for setting that up. Moving house with equity release covers the practical side, and Legal & General notes that some plans are portable.

The Standards also say a customer "must obtain independent legal advice when initially taking out equity release", before completion. The lifetime mortgage standards, such as the no negative equity guarantee, are not among the two for reversions; the Council's standards in full and the solicitor's role go into them.

How the FCA regulates home reversion

Article 63B of the Regulated Activities Order makes entering into a regulated home reversion plan as plan provider a regulated activity, and administering one too where the plan was entered into on or after 6 April 2007. The FCA's equity release chapter, MCOB 8, aims for every customer to be advised. Outside some limited exceptions, an execution-only sale needs the customer to have rejected the advice, been warned of the consequences and given the firm a specific instruction to proceed.

The FCA also controls the label: under MCOB 3A.2.6R, any communication, financial promotions included, must call the product a "home reversion plan" and use no other expression. Are home reversion plans regulated? has the detail, and finding an equity release adviser covers checking one.

Home reversion compared with a lifetime mortgage

The difference is ownership. On the Council's description of a lifetime mortgage, you keep ownership, interest rolls up and compounds, and your estate repays the loan and interest after death or a move into long-term care. A reversion leaves nothing to repay, because you have sold a share, but any later rise in that share's value belongs to the provider. Compound interest, early repayment charges and the other lifetime mortgage trade-offs are set out in the equity release guide.

Royal London's June 2026 guide puts home reversion plans at less than 1% of the overall market. Home reversion vs lifetime mortgage sets the two side by side, who offers home reversion plans looks at the firms, and equity release fees covers the costs of arranging either. In Scotland, section 9 of the 1970 Conveyancing and Feudal Reform (Scotland) Act requires security for a debt over land to take the form of a standard security, which is how a Scottish lifetime mortgage is secured.

Home reversion plan pros and cons

Which side of the ledger weighs more depends on the person, and on how much of the home's value they want to pass on.

  • In its favour: no interest and no growing debt; certainty, since the Council points out that you know precisely what you have parted with and what is ring-fenced, perhaps to leave in a will; and you can sell part rather than all.
  • Against it: a price below market value; no share in future price growth on the part sold; a smaller estate and inheritance; a possible effect on means-tested benefits; and, in Royal London's words, buying the share back "can be difficult and expensive".

For the wider weighing, see whether equity release is a good idea and the alternatives to equity release, downsizing among them. A plan that would help with care costs is a separate question: equity release to pay for care.

Home reversion plan term, full sale and sale and rent back

Is there a minimum term for a home reversion plan?

A lifetime plan has no set term: your right to live there ends on death or a move into a care home. The twenty-year figure in the FCA glossary applies only where an arrangement makes that right end after a specified period, which must then be at least twenty years from the start to fit the definition. Whether a plan you are offered has any fixed period is something the adviser can check with you free through the form.

Can I sell the whole of my home?

Yes: the Council describes the provider buying "all or part" of the house. Royal London says that if you sell 100% you own none of it and cannot raise more money later, whereas after selling a share you could ask the provider about selling more.

Is a home reversion plan the same as sale and rent back?

No. MCOB 3A.2.6R says a regulated sale and rent back agreement must be described as a "sale and rent back agreement", not as "equity release", while a home reversion plan is one of the two main kinds of equity release.

Weighing it up with an adviser

Whether selling a share of your home suits you turns on your age, health, family and plans for the property. A qualified equity release adviser can cover all of that in one conversation; a free call-back can be arranged with the form on this page. You would also take independent legal advice from your own solicitor before anything completes.

Sources: Equity Release Council, Home Reversion and The Standards (V2.0, May 2025); MoneyHelper, Home reversion (archived 6 December 2025); FCA Handbook, glossary, MCOB 8 (last updated 26 June 2026) and MCOB 3A.2; legislation.gov.uk, Regulated Activities Order, article 63B and 1970 Act, section 9; Royal London (14 June 2026); Legal & General (3 March 2026). Accessed 22 October 2026.