Reversion Plans
Under a reversion plan, home owners over 65 may sell a
part or all of their home at the outset to the reversion company. The
reversion company applies a discount against the current value of the
property, to compensate them for not taking possession of their portion of
the property until years later. Because this period of time is an unknown
factor, the discount may reflect a fairly wide margin in the reversion
company’s favour. As such, there is a risk of the owners receiving a
poor return under these schemes if they die or go into a care home within
a few years of its inception.
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The main features of
Reversion Plans are:
Part or all of the of the home is sold at the
outset. A valuation of the property is necessary and a
fee for this is payable, together with solicitors costs Once in place, a reversion plan should be
considered irrevocable. You will be able to live in your own home as long
as you wish. There are no restrictions on how you spend the
money. -
There is no maximum age limit
The reversion company take possession of their
share of the house after death (second death if joint borrowers), or
after the (second) borrower permanently moving into a care
home. Typically the house will then be sold.
     
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The following
tables give an idea of the amounts offered on a property valued at
£200,000, for a given age of vendor:
- Source - Hodge Equity Release Shared Growth Reversion
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% of property sold
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| single
male |
90% |
50% |
|
Age
65 |
£78,970.00 |
£44,605.00 |
|
70 |
£86,725.00 |
£48,923.00 |
|
75 |
£94,855.00 |
£53,452.00 |
|
80 |
£102,973.00 |
£57,968.00 |
|
85 |
£111,607.00 |
£62,780.00 |
|
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| Single
Female |
90% |
50% |
|
Age
65 |
£71,885.00 |
£40,657.00 |
|
70 |
£79,839.00 |
£45,087.00 |
|
75 |
£88,690.00 |
£50,020.00 |
|
80 |
£98,059.00 |
£55,244.00 |
|
85 |
£107,613.00 |
£107,613.00 |
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| Joint
Male/Female |
90% |
50% |
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Age
65 |
£61,937.00 |
£35,120.00 |
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70 |
£70,987.00 |
£40,159.00 |
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75 |
£81,766.00 |
£46,174.00 |
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80 |
£90,442.00 |
£51,009.00 |
|
85 |
£99,457.00 |
£56,034.00 |
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