What properties qualify for equity release?
So you’re interested in equity release, but aren’t sure if your home will meet the eligibility requirements? While most common types of property are usually accepted, it may be a bit harder to get equity release on a non-standard construction property. We take a look at what you need to know.
What makes a property a good candidate for equity release?
When deciding whether to offer you an equity release plan, providers look at a number of factors that determine if you’re eligible. The type, value, location and condition are all considered.
Properties that are commonly accepted for equity release include:
- Houses (detached, semi-detached or terraced)
- Some types of flats
To qualify for equity release the youngest homeowner needs to be 55 or over and your property should be worth at least £70,000. However, the type of property you own will have to be considered as your provider will need to be sure that your home offers enough security for an equity release plan.
Can you get equity release on a leasehold property?
For most standard construction houses and bungalows, it’s possible to get equity release even if it’s leasehold rather than freehold.
In the UK leasehold is more common on flats and apartments than on houses and bungalows, but for some older properties you may have a leasehold where you’re liable for annual costs such as ground rent and a contribution to maintenance and service charges.
You’ll need to know how many years are left on your lease, as some providers will have a minimum of 75 years to over 100 years that they’ll expect to see before considering your property for equity release. You may be asked to consider also buying the freehold before or as part of an equity release agreement.
Can you get equity release on a flat?
You can get equity release on some flats, but it depends on the ownership, location and value. Most flats in the UK are leasehold, which means you don’t own the land the property is built on. The lease that you buy from the landowner allows you to buy and sell the property, but not the land.
- Equity release on leasehold flats depends on the length of lease you have left. Most providers only ask that you have 75 years left on the lease, although some may ask for 90, 100, 120 years or even more. If it’s possible to extend the leasehold, providers may consider that as part of the arrangement
- Equity release on freehold flats is possible, as long as you also hold the leasehold to shared areas such as hallways, stairs, gardens and the roof. Without this (or being able to arrange it) there can be problems when it comes to maintenance, and it might be more difficult to secure equity release
- Equity release on ex-council flats depends on if they’re outside the discount period set by the local council. Some providers may also want to look more carefully at the construction materials and build
- Equity release on retirement flats may be possible with some providers, although lease conditions on retirement properties can be restrictive. They often include additional charges or other clauses that dictate how a property can be sold, which make them less attractive to equity release providers.
Can you get equity release on non-standard construction property?
A non-standard construction is a building made from something other than standard materials, like brick and stone, with slate or tile roofs.
Equity release providers will have their own strict criteria, but this typically means:
- timber-framed buildings
- thatched roofs
- glass walls
- steel frame
- tin roof
There may be less demand for non-standard properties and prices aren’t as predictable, making them less attractive to equity release providers. Non-standard properties are also considered more difficult and more expensive to maintain, which will affect its desirability and value.
Can you get equity release on park homes?
No you can’t, as park homes fall into their own unique category of property. They’re classed as mobile homes as while you own the structure of the home itself, you don’t own the ground that it sits on (and it’s not leasehold). They’re seen as a depreciating asset, and don’t provide the security a provider is looking for to be able to come to an equity release arrangement.
Can you release equity from a property with shared ownership?
You can’t get equity release unless you own the property 100%, so if you’re in a shared ownership scheme your property won’t be considered. The exception would be if you could afford to buy back the remainder of the property and take sole ownership.
With any jointly-owned property you can’t get equity release just on your share. You would need either a joint application in both names, or to remove an owner from the deeds and then make an individual application.
Is it possible to get equity release on commercial property in the UK?
If you use your property partly or completely for commercial purposes, such as a hotel, B&B, or if it’s a buy‑to‑let, this will probably not be accepted for equity release. Equity release providers generally stipulate that the property is your main residence, although some providers will consider your second home.
Check your eligibility for equity release
This isn’t a comprehensive list, and whether you can get equity release for your property will depend on you, your home and a willing provider. While we’ve listed the most common exceptions above, it might be harder – or impossible – to get equity release on other property types such as studio and basement flats, houseboats, and farms restricted to agricultural use. Your eligibility will become clear when you talk to an adviser about your specific situation.
To check if you’re eligible for equity release, you can get started by answering a few questions on our online eligibility checker.
Am I eligible for equity release?Find out now
More on equity release
For more information and to help you understand equity release a little better visit some of our other articles and pages.