Properties Not Suitable for Equity Release – What You Need to Know

Equity release can be a great way to unlock cash from your home—but not every property qualifies. Lenders have strict criteria about which homes are eligible, and if yours doesn’t meet them, your application could be declined.

This guide breaks down the key reasons why some properties aren’t suitable for equity release and what you can do about it.

Why Property Type Matters

Equity release works differently from a traditional mortgage. Instead of monthly repayments, the loan is usually repaid when your home is eventually sold—typically after you pass away or move into long-term care. That means providers need to be confident your property will hold its value and be easy to sell in the future.

If there’s anything unusual about the construction or condition of your home, it could raise a red flag.

Construction Types That May Be Declined

Lenders tend to prefer homes built from bricks and mortar with a tiled or slate roof. If your property falls into a “non-standard” construction category, it may not be eligible.

Examples include:

• Timber or steel-framed buildings
• Properties with concrete walls or flat roofs
• Homes with thatch, felt, tin, or rubber roofs
• Prefabs, static homes, houseboats, or caravans

That said, not all lenders have the same rules. One provider might turn you down, while another could accept your home under certain conditions. For instance, Canada Life accepts steel-framed homes built after 2000—but not ex-local authority ones.

Listed Buildings

Listed properties can be tricky. Some lenders will consider Grade II or Grade C listed homes, but many won’t touch Grade I, Grade II* or their equivalents. That’s because restrictions on what you can change can make resale more difficult.

Mixed-Use Homes

Do you run a business from your home? If your property is partly commercial—like a B&B, guest house, farm, or cattery—it might not qualify. However, some lenders are becoming more flexible in this area, so it’s worth checking.

Spray Foam Insulation – A Common Sticking Point

Spray foam insulation can help with energy efficiency, but it’s a big red flag for many equity release lenders. Why? Because it can hide damp, cause timber decay, or make a home harder to survey and sell.

If the insulation was added after the home was built, approval is much less likely. In some cases, you might be able to remove it and reapply—but this can be costly. Speak to an adviser before taking any action.

Alternatively, a home reversion plan may still be an option, as these have slightly different property requirements.

Problem Locations

Where your home is located also matters. While most lenders accept UK mainland properties, some are more cautious about:

• Scottish Islands
• Northern Ireland
• The Channel Islands

Lenders also look at what’s near your home. If your property backs onto a railway line, sits near a sewage plant, or is close to noisy or smelly commercial businesses, it could affect your eligibility.

Other potential deal-breakers include:

• Flood risk areas
• Proximity to electricity pylons or substations
• Contaminated land
• Evidence of previous mining or subsidence

Every case is assessed individually, and some issues may only affect you if they’re particularly close to your home.

Condition and Value

Before approving an application, most lenders will send out a valuer to inspect your home. They’ll be looking for:

• Structural damage or signs of subsidence
• Serious damp or cracking
• Evidence of previous repairs (like underpinning)

If there are any concerns, the lender may ask you to carry out repairs before they can approve the plan. Some may even allow you to use part of the released money to fund the repairs—but only after a reinspection confirms the work’s been done.

Invasive Plants – Like Japanese Knotweed

Japanese knotweed is a growing issue in the UK and can seriously affect a property’s value. If it’s found near or on your land, your application may be declined unless the infestation is professionally treated and under long-term management.

Other Common Criteria

There are a few other eligibility points to be aware of:

• Your home must usually be worth at least £70,000
• It can be freehold or leasehold (depending on the terms)
• Any existing mortgage will need to be cleared as part of the process

Some lenders don’t accept ex-council flats, while others do under certain conditions. And while most require the property to be your main residence, there are providers offering second home or buy-to-let equity release too.

Not Sure if Your Property Qualifies?

Every lender has different rules, so don’t assume your property is ineligible without checking. An experienced equity release adviser can help you navigate the market, explore your options, and match you with a provider that suits your situation.

If your home has any of the issues above, speak to an adviser early on. It could save you time—and help you avoid unnecessary costs or disappointment later.