The first home reversion product to be offered in the Irish market since the financial crash has been launched by a company trading as Home Plus.

Home reversion product involve homeowners selling a share in their property of between 20-70% to the company, in exchange for a lump sum.

The remaining stake is retained by the home owner who can continue to live in the house for the remainder of their life or until they enter long-term care.

However, such products have attracted criticisms in the past for being poor value for money.

The Competition and Consumer Protection Commission has previously warned that the money a home owner receives from any home reversion product will be much less than the market value of the share in their property.

This means that the difference between the market value and the lump sum received for the share sold is the true cost of the product.

As a result, if the home owner does not live long, the arrangement may prove very expensive.

The value of the stake being bought by Home Plus comes from an actuarial calculation based on the market value of the property with and without vacant possession, house price inflation, and the life expectancy of the homeowner.

If a higher lump sum is needed by the property owner, Home Plus says they may need to make a monthly payment as part of the plan.

The company claims the product will suit people over the age 55 who have equity tied up in their home that they wish to release to help fund their retirement.

It says the money can also be used to pay off mortgage or other debt if the home owner is in arrears and at risk of having their property repossessed.

"Through Home Plus we are launching a solution for people who may be at risk of losing their home; and for people who have a large portion of their wealth tied up in their home, with little left over for their retirement needs," Ian Higgins, CEO of Home Plus.

"Properly structured, Home Reversion allows people to resolve debts or other important financial needs, while at the same time ensuring they can remain in their home enjoying an independent life."

However, the CCPC's current advice on home reversion products also highlights how home owners won't benefit from the full increase in the value of their home if property prices rise as the home reversion provider benefits from the rise in the value of its share.

If property prices fall though, they will benefit from having received a cash value based on prices before the fall.
Home Plus is regulated by the Central Bank of Ireland and as a result it will have to ensure that customers seek professional advice from a qualified financial advisor before taking out a home reversion plan.

It says it also recommends independent legal advice is sought.