Equity release tenants in common

Equity release plans have gained significant popularity in recent years as a means for homeowners to unlock the value of their property while still being able to reside in it. Among the various forms of equity release, tenants in common is a notable option that caters specifically to joint owners who wish to release equity from their shared property. In this comprehensive article, we will delve into the intricacies of equity release for tenants in common, exploring its benefits, eligibility criteria, considerations, and the key players in the market.

Understanding Tenants in Common

When two or more individuals jointly own a property, they can hold it either as joint tenants or tenants in common. In the context of equity release, the distinction between these two forms of ownership becomes crucial. Joint tenants have equal rights to the entire property, and upon the death of one owner, the surviving owner(s) automatically inherit the deceased owner’s share. On the other hand, tenants in common each own a specific, distinct share of the property, which can be equal or unequal. In the event of a co-owners death, their share is not automatically transferred to the surviving owner(s) but instead passed on according to their will or through the rules of intestacy.

Equity Release Application for Tenants in Common

If you are a joint owner looking to release equity from your property, the process begins with an equity release application. To navigate this complex procedure, seeking advice from a qualified financial adviser or mortgage broker is highly recommended. These professionals specialize in equity release and can guide you through the application, ensuring you make informed decisions tailored to your specific circumstances.

Equity Release Providers and Products

Equity release providers offer a range of products designed to suit the diverse needs of homeowners. When it comes to tenants in common, it is essential to choose an equity release lender that accommodates this form of ownership. Reversion plans, also known as reversion schemes are a common type of equity release product available to joint owners. Under these plans, you sell a percentage of your property to the equity release provider in exchange for a lump sum or regular payments. Another option is a joint lifetime mortgage, which allows you to borrow against the value of your property while retaining full ownership. These products come with different terms, interest rates, and repayment options, so careful consideration and professional advice are crucial to selecting the most suitable option.

Eligibility Criteria for Equity Release

Before proceeding with an equity release loan, several eligibility criteria should be considered. Equity release providers typically assess factors such as the age of the youngest applicant, property type, property value, and outstanding mortgage. Additionally, the property must meet certain requirements, such as being in good condition and located in an eligible area. It is worth noting that equity release providers generally impose age restrictions, typically requiring the youngest homeowner to be at least 55 or 60 years old. We would suggest you contact an equity release adviser before starting your application. An equity release adviser will help you determine if you meet the criteria and, if not, what steps can be taken to increase your chances of acceptance.

Monthly Repayments and Service Charges

When considering equity release for tenants in common, it is important to understand the financial implications. Equity release plans may involve monthly repayments to the lender. These repayments can be fixed or variable, depending on the terms of the agreement. It is crucial to carefully assess your financial situation and determine if you can comfortably meet these monthly obligations. Additionally, joint owners must consider any service charges associated with the property, such as maintenance fees or insurance costs, and how they will impact their equity release plan. If you are interested in learning more, you can read our article on BTL mortgages while tenants in SITU.

Sale Proceeds and Key Considerations

One of the key benefits of equity release is the ability to access a lump sum or regular payments based on the value of your property. However, it is essential to carefully consider the impact of releasing equity on the total sale proceeds of the property. Releasing equity may reduce the value available for potential future sales or inheritance purposes. Joint owners must engage in careful planning and discussions to ensure that releasing equity aligns with their long-term goals and financial objectives.

Surviving Co-Owner and Repayment Charges

In the event of a co-owners death, it is important to have a clear plan in place regarding the transfer of equity and the impact on the surviving co-owners ownership rights. Tenants in common do not automatically inherit the deceased co-owners share, so it is essential to consult with legal professionals and financial advisors to establish a strategy for the equitable distribution of assets. Additionally, it is crucial to carefully assess any potential repayment charges associated with the equity release plan to avoid unexpected financial burdens.

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Types of Equity Release for Tenants in Common

There are different types of equity release available to joint owners in tenants in common arrangements. Lifetime mortgages are a popular option, allowing joint owners to borrow against the value of their property while retaining ownership. With a lifetime mortgage, there are typically no monthly repayments required. Instead, the loan and accumulated interest are repaid upon the sale of the property or when the last surviving owner enters long-term care or passes away. Another option is a home reversion plan, where joint owners sell a percentage of their property to the equity release provider in exchange for a lump sum or regular payments. These plans allow joint owners to continue living in their homes as long as they wish.

Equity Release Providers and Advisors

When considering equity release for tenants in common, it is essential to work with reputable equity release providers and seek advice from qualified equity release advisors. Reputable providers, such as Aviva, Bridgewater, and Mansfield Building Society, have established themselves in the market by offering a range of equity release products tailored to joint owners. Qualified advisors possess the necessary expertise to assess your unique circumstances, recommend suitable equity release options, and guide you through the process.

Property Ownership and Titles

Joint owners must ensure that property titles accurately reflect the tenants in a common ownership arrangement. Legal advice should be sought to confirm the appropriate title registration and ensure that the shares of each owner are properly recorded. It is essential to have a clear understanding of property ownership and the rights and responsibilities associated with tenants in common arrangements.

Tax Considerations and Transfer of Equity

When releasing equity from a property, joint owners should also consider the potential tax implications. Equity release can impact tax obligations, including inheritance tax and capital gains tax. It is advisable to consult with tax professionals or financial advisors who specialize in equity release to understand the specific tax considerations based on your circumstances. Additionally, the transfer of equity should be carefully managed to ensure compliance with legal requirements and minimize any potential tax liabilities.

Northern Ireland and Land & Property Services

It is important to note that the process of equity release and the associated legal requirements may vary in different regions. In Northern Ireland, for example, the Land & Property Services plays a crucial role in the registration and regulation of property titles and ownership. Joint owners in Northern Ireland should consult with the Land & Property Services or seek professional advice to ensure compliance with regional regulations.


Equity release for tenants in common provides a valuable opportunity for joint owners to unlock the value of their shared property while retaining ownership and residence. By understanding the intricacies of equity release, considering eligibility criteria, assessing monthly repayments and service charges, and seeking advice from reputable equity release providers and advisors, joint owners can make informed decisions and maximize the benefits of equity release. With careful planning, joint owners can effectively leverage their property wealth to enhance their financial situation, secure their retirement, and enjoy a greater sense of financial freedom.

About The Author

mortgage broker damian youell

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Damian is an experienced mortgage broker, founder of NeedingAdvice.co.uk Ltd and company director. With over a decade working as a mortgage broker he has a strong understanding of hard to place mortgage cases. With hundreds of 5 star client reviews. hundreds of repeat clients his work speaks for himself.

He started NeedingAdvice.co.uk as a one man band with the philosophy of putting clients needs ahead of his own. This ethos of offering excellent customer service has helped the business grow over the years. He gets satisfaction on getting cases pushed through to offer stage where other mortgage broker and companies have failed.

Throughout his time as an adviser he has carved out a niche area of advice helping clients with their business protection requirements too. Having helped hundreds of client with Relevant Life Policies, Shareholder Protection Insurance, Keyperson Policies and other important protection requirements of large to small businesses.

At home he is a family man and likes to spend his time with his four children and wife Lisa. He enjoys going on holidays spending time with friends and going for walks.