Equity release is a popular way for homeowners aged 55 and over to unlock tax-free cash from their property. However, not all homes qualify. Lenders assess properties carefully to ensure they meet eligibility criteria, and certain types of homes may be declined due to risks associated with their value, condition, or location.
If you’re considering equity release, it’s important to understand what could make a property ineligible and whether there are ways to improve your chances of approval. In this guide, we’ll explore the key property restrictions, why they exist, and what you can do if your home doesn’t qualify.
What Types of Properties Are Not Eligible for Equity Release?
Equity release providers have strict lending criteria, and properties that pose a risk to long-term value or salability may not be accepted. Some common reasons for rejection include:
1. Non-Standard Construction Homes
Homes built with non-traditional materials can be difficult to sell or insure, making lenders hesitant to approve equity release. Examples include:
❌ Prefabricated concrete homes (e.g., Airey or Cornish units)
❌ Timber-framed houses (without brick cladding)
❌ Steel-framed houses
❌ Homes built using wattle and daub or cob walls
✔ Potential Solution: Some lenders accept certain non-standard homes if they meet structural requirements and are mortgageable by mainstream lenders. A surveyor’s report may be required.
2. Flats in High-Rise Buildings
Equity release providers are cautious with flats in high-rise buildings, especially if:
❌ The block is taller than five or seven stories (varies by lender)
❌ The property is ex-local authority housing (often restricted due to resale issues)
❌ The building has cladding concerns (post-Grenfell regulations have made some flats difficult to mortgage)
✔ Potential Solution: Some lenders accept high-rise flats if they are privately owned, well-maintained, and have a long lease. If cladding is an issue, obtaining an EWS1 form may help.
3. Homes with Short Leases
Leasehold properties may be declined for equity release if:
❌ The remaining lease term is below 75 years
❌ The freeholder has restrictions on equity release products
✔ Potential Solution: Extending the lease before applying can improve eligibility. Some lenders may require a lease of at least 90–125 years.
4. Properties in Poor Condition
Homes that require significant repairs or have structural issues may be rejected, including:
❌ Damp or subsidence problems
❌ Roof damage or missing tiles
❌ Significant wear-and-tear that affects valuation
✔ Potential Solution: Completing essential repairs before applying may increase approval chances.
5. Properties with Commercial or Agricultural Use
If a property has any commercial use, such as:
❌ A shop or office attached to a residential home
❌ A farm or agricultural land
❌ A home with more than 40% commercial space
It may not qualify for equity release.
✔ Potential Solution: Some lenders accept mixed-use properties if the residential portion is the majority and clearly separate from commercial operations.
6. Properties in High-Risk Locations
Lenders may decline equity release for homes in areas that are:
❌ At high risk of flooding or coastal erosion
❌ Prone to subsidence or landslips
❌ Located near mines, quarries, or landfill sites
✔ Potential Solution: A flood risk report or subsidence survey may help demonstrate the property is insurable and mortgageable.
7. Listed Buildings
Some Grade I or Grade II listed buildings are not eligible for equity release due to:
❌ Strict renovation restrictions that affect resale value
❌ Potential high maintenance costs for future buyers
✔ Potential Solution: Some lenders approve Grade II listed homes if they are well-maintained and have a strong resale market.
8. Retirement Homes and Sheltered Housing
❌ Some equity release lenders will lend on these types of property, but they are limited. These properties often have resale restrictions that limit demand.
✔ Potential Solution: Some lenders may consider independent retirement properties that don’t have restrictions on resale.
Why Do Lenders Have Property Restrictions?
Equity release providers must ensure that the property:
✔ Retains its value over time so the loan can be repaid when sold
✔ Is easy to sell when the homeowner passes away or moves into care
✔ Is insurable and mortgageable under standard lending criteria
If a home poses a risk to long-term value, it may be declined for equity release.
What Can You Do If Your Property Is Rejected?
If your home is not eligible for equity release, consider the following options:
✔ Check with different lenders – Some lenders have more flexible criteria for certain property types.
✔ Make improvements – Repairs, lease extensions, or paperwork (e.g., flood risk assessments) may help.
✔ Consider downsizing – Selling your home and moving to an eligible property may be an alternative.
✔ Explore alternative borrowing options – Retirement interest-only mortgages or other financial solutions may be available.
To find out whether your home qualifies, speak to a specialist via our Equity Release Adviser page.
FAQs About Property Eligibility for Equity Release
Can I Get Equity Release on a Flat?
Yes, but restrictions may apply to high-rise buildings, ex-local authority flats, or properties with cladding concerns.
What If My Home Has a Short Lease?
Lenders typically require at least 75+ years remaining. You may need to extend your lease before applying.
Are There Any Workarounds for Non-Standard Construction Homes?
Some lenders accept non-standard homes if they are structurally sound and mortgageable.
What If My Property Is in a High-Risk Area?
Providing proof of insurance and a structural survey may improve your chances of approval.
Can I Get Equity Release on a Retirement Flat?
Most retirement flats are not eligible, but some lenders may accept properties without resale restrictions.
Next Steps
If you’re considering equity release and want to check whether your property qualifies:
- Speak to an expert on our Equity Release Adviser page.
- Use our Equity Release Calculator to estimate how much you could unlock.
- Read more about equity release in related articles:
Understanding property eligibility before applying ensures a smoother process and helps you plan the best approach to releasing equity from your home.
