The UK Home Reversion schemes is a situation where you sell your home or a percentage part of it to a Reversion company however you retain the right to reside in it rent free for the rest of your natural life. The funds you receive from them can be accepted as a cash lump sum, a monthly amount or a combination of these two.
The company is not allowed to sell the property unless you and your spouse decide to move into long-term care or you are both dead. This does mean however that you will definitely not receive the current full market value of your property as the Reversion company could wait up to 30 years before they can sell the property and make their profit.
The normal payout amounts are 20% to 60% of the property’s value, but are dependent on a few factors, the primary one being the age of both you and your partner. The older you are the higher the payout percentage will be.
Health is also an important factor and so as far as UK Home Reversion schemes are concerned, old age and poor health are a distinct benefit as more funds can be raised.
It is not a requirement to sell 100% of the property’s value. You can sell any portion of the value, the choice is yours. Selling all of it now will give you more money however upon death you will not have any assets to pass on to your beneficiaries. If you sell part of it only, you would, in the future, have an option to sell more of the property. This is a good idea as the older you become, the amount you can get increases.
If you are considering making use of the UK Home Reversion scheme, do not be concerned that your tenancy may be at risk as a legal document called a Lifetime Lease has to be signed by the Reversion company.
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