Can I sell my house and still live in it?

Yes, in a small number of ways: a home reversion plan lets you sell all or part of your home to a provider and keep living there rent-free for life, while a lifetime mortgage lets you release money without selling at all. Sale and rent back also lets you sell and stay, as a tenant, but it is regulated by the Financial Conduct Authority (FCA) and carries serious risks. Selling to a family member is another possibility, with its own pitfalls.

We should be clear from the start: Sell My Property Online doesn’t arrange any of these. We introduce homeowners to vetted cash buyers for outright sales, where you move out on completion. If you want to stay in your home, the free, impartial guidance service MoneyHelper is the place to start.

What is equity release?

Equity release lets you access some of the money tied up in your home without moving out. The Equity Release Council, the trade body for the sector, says it is designed for homeowners aged 55 and over and that all equity release products are regulated by the FCA. There are two types.

Lifetime mortgage

A lifetime mortgage is a loan secured on your home. You keep ownership. The Equity Release Council explains that interest is usually rolled up, meaning it is added to the loan and compounds, although some plans let you make payments. The loan and interest are repaid, normally from the sale of your home, when you die or move into long-term care. For couples, that happens when the last person living in the home dies or moves into care.

Plans from Equity Release Council members must meet its product standards, including:

• the right to live in your home for the rest of your life, or until you move permanently into care
• a no negative equity guarantee, so you or your estate will never owe more than the home is worth
• the right to move to a suitable new home and take the plan with you
• a fixed interest rate, or a variable rate with a fixed cap

Council membership is voluntary, so check whether a provider is a member.

Home reversion plan

A home reversion plan is the closest thing to selling your home and staying in it. The provider buys all or part of your home and pays you a tax-free lump sum or regular payments. In return, you get a lifetime lease, which the Equity Release Council describes as guaranteeing your right to stay in the property rent-free for the rest of your life. Its guide says plans are usually available from age 60.

The trade-offs are significant. The Equity Release Council explains that:

• you receive less than the market value of the share of your home you sell
• the share you keep stays the same, whatever happens to property prices
• when you die or move into long-term care, the home is sold and the proceeds are split according to who owns what

In law, a regulated home reversion plan is a separate product from sale and rent back.

What to weigh up

The Equity Release Council’s consumer guide points out that equity release reduces what you can leave to your family, and can affect means-tested benefits and tax. You will need to speak to a qualified, authorised adviser, and independent legal advice is a mandatory part of the process. The guide also lists alternatives an adviser should talk through, including retirement interest-only mortgages, using savings, help from family and checking for unclaimed benefits.

If you already have equity release and want to sell, our guide to selling with equity release explains how that works.

What about sale and rent back?

Please treat sale and rent back with great care. In a sale and rent back arrangement, you sell your home and stay on as a tenant. An arrangement where you sell and are entitled to live in at least 40% of the property as your home is likely to count as a regulated sale and rent back agreement. It has been regulated since 2010 and is now regulated by the FCA, so only firms authorised for it may offer it. Check any firm on the FCA Register.

Sell My Property Online does not offer, arrange or recommend sale and rent back. Our guide to sale and rent back explains the rules and the serious risks in full, and MoneyHelper and free debt advisers can help you look at every other option first.

Could you sell to a family member and stay?

Some people sell their home to a son, daughter or other relative and carry on living there. It can work, but it needs careful thought. Once the home belongs to them, their circumstances, such as a divorce, debts or a death, could affect your right to stay. A solicitor can help you set out clearly, in writing, whether and how much rent you pay.

There can be tax consequences too. GOV.UK gives the example of giving your home to a relative but still living there as a gift with reservation, which still counts towards the value of your estate for Inheritance Tax. Take independent legal and tax advice before you agree anything. Our guide to selling a house to a family member covers the process.