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Equity Release & Property Types

Looking at the various property that are/are not acceptable for the purpose of equity release

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: October 22, 2021

Can you get equity release on any property types?

We receive lots of enquiries asking about equity release and, specifically, what the rules are for the types of property deemed acceptable by lenders for the purpose of this form of mortgage lending.

UK lenders follow strict guidelines regarding what properties are deemed acceptable. The good news is there’s quite a wide range of options available if you are considering an equity release scheme.

Once you’ve read through the information below, make an enquiry and one of the expert advisors we work with can discuss this with you in more detail.

How does equity release work?

Equity release schemes allow you to unlock money tied up within the value of your home. They are available in the UK to anyone over the age of 55 and designed to assist someone approaching, or who may have reached, retirement with lots of money in fixed assets (such as property) but with only a modest amount of available cash.

They are particularly attractive to retirees with a low income as there is no requirement for regular interest payments. All the interest rolls up on top of the original money borrowed and repaid either when you die or move into a care home(whichever event occurs first).

If you’d like more general information about lifetime mortgages take a look at our guide here.

What are the general rules on property for equity release?

To be eligible for an equity release mortgage you must own your own property (debt-free) in the UK and be resident within the country for at least six months of the year. There is no need for a lender to conduct an affordability assessment as no payments are required.

A lender will use your main UK residence as the basis for the lending you’ve applied for and as security for the equity release mortgage. In this respect, a full valuation of your property will be required in order to establish how much you will be able to borrow.

At some point in the future, either upon your death or move into a care home, the lender will look to sell your home to recoup the amount owed. As such, your property will need to be in a sellable condition.

The construction type and material build, therefore, will be a factor as your lender will want to ensure it is suitable as security for your equity release mortgage. Most lenders will not consider properties worth below £70,000 as appropriate for this form of lending.

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Can you get equity release on a leasehold property?

With a leasehold property, as opposed to freehold, you do not own the land your home is built on. Technically you don’t actually own the property either but you do own the lease which you purchase from the landowner. The lease allows you to buy and sell the property but not the land.

If you own a leasehold property and are considering an equity release mortgage it’s important to understand exactly how long your leasehold agreement still has to run. Typically, leaseholds can run for years, decades or even centuries.

It is possible to get an equity release mortgage on a leasehold property, however, the lender will want to know how long your lease still has to run. The minimum remaining lease required will vary from lender to lender.

The good news is most equity release providers only require a minimum of 75 years remaining on the lease, but some require 90 years and a few will want to see over 100 years.

If you own a leasehold property and wish to discuss how you can attain an equity release mortgage, make an enquiry and we can arrange for an advisor we work with to contact you directly.

Can you get equity release on a flat?

Typically, most flats or apartments fall into the category of leasehold properties, therefore, it is possible to get an equity release loan if you own this type of property. However, as stated above, the lender will take into account how long your lease has to run before it expires.

There may also be other restrictions that vary from lender to lender. For example, some lenders will deem leasehold flats as acceptable property types as long as they are in private blocks of seven stories or fewer.

Can you get equity release on a park home?

No, unfortunately, you can’t get equity release for park homes. Under UK law, park homes are classed as mobile homes and all equity release providers will only use either freehold or leasehold properties as security for the loan.

Park homes are also (in most cases) seen as a depreciating asset and a lender requires security on homes they believe will be able to sufficiently cover the outstanding debt.

Can you get equity release on a non standard property?

It may be possible to get equity release on a non standard construction, however each lender will have their own strict criteria on different construction types, such as:

If you make an enquiry with us we can arrange for an equity release specialist to contact you and discuss further if you think your home may fall into this category.

Can I get equity release on a listed building?

Yes, it may be possible but the number of approachable lenders will be fewer. Listed buildings are considered riskier than standard properties, but there are specialist lenders who may be willing to offer you an equity release product for a Grade I, Grade II, or Grade II* building, and the advisors we work with know who they are.

You can read more about mortgages on listed buildings here or make an enquiry for more information.

Can I get equity release for a property with Japanese Knotweed?

Again, it may be a possibility but a specialist lender will likely be called for. The niche mortgage providers who offer equity release deals to customers with properties that have Japanese knotweed usually have a survey carried out to assess the extent of the risk the plant poses to the property (if any).

They may base their lending decision on the outcome of this survey, but the other factors we’ve covered throughout this article will also be considered.

You can read more about mortgages for properties with Japanese knotweed here.

Can you get equity release on a right to buy property (ex council)?

An ex-council house, as long as it is outside the discount period set by the relevant local council, is classed in the same way as other residential homes, whether freehold or leasehold and as such it is possible to secure an equity release mortgage.

Some lenders may also want to scrutinise the construction materials used when valuing the property.

Can you get equity release on a holiday home?

Unfortunately not. General equity release rules (as outlined above) state that the property used for the purposes of security on an equity release loan would need to be your main residence in the UK.

Why you should speak to an expert equity release broker

At Online Mortgage Advisor we can offer you a first-class service tailored to your own specific needs with access to the most experienced brokers available that can provide:

  • Holistic, whole of market, solutions
  • Excellent relationships with lenders
  • OMA accredited advisors
  • LIBF Training course

Speak to an equity release expert

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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