Part-sale of a property — what it really costs, and the alternative
A part-sale sounds straightforward: sell a share, keep the rest, free up capital. What rarely stands in the foreground is the price — a running usage fee, and the buyer sharing in whatever the property gains from here. This page sets out how the model works and when borrowing against the property is the markedly cheaper route.
In short
How much can I sell under a part-sale?
Providers usually buy 10 to 50 per cent of the property value. The rest stays yours, and the usage fee runs on the share you sold.
The provider shares in any value growth
The provider shares in it in proportion to their stake — if the value rises, so does their payout at buy-back. That is what separates a part-sale from a loan with a fixed outstanding balance.
When is a loan the better route?
For anyone with an income able to carry a repayment: the property stays 100 per cent in your assets, no future growth is given away, and heirs inherit the whole property less the debt.
What does a part-sale of the property cost compared to a loan against it?
With a part-sale, you sell a share of your property — typically 10–50 % — to a specialised provider and pay a running usage fee for as long as you continue living there. The fee repays nothing; it is a pure usage charge on the sold share. When the property is eventually sold in full, the provider receives their share of the then-current value — including any appreciation since the part-sale — plus usually a completion fee. A loan against the property works differently: you remain 100 % owner, the bank registers a charge and pays out a sum you repay with interest, and the property passes to your heirs in full, less the remaining debt. For most owners with ongoing income, borrowing against the property is the cheaper path, because it does not give up a share of future value growth. A part-sale mainly makes sense when a loan is no longer viable.
Why we write about part-sales although we do not arrange them
We do not arrange part-sale models. Our business is lending against property — raising capital through an ordinary bank loan secured by a charge on the title. This page exists because many owners of a property they have paid off, who need capital, meet a part-sale offer first, before they know the alternative exists at all. We would rather you understood both routes before you decide.
Part-sale of a property: the sequence
A specialist provider buys a share of your property — usually between 10 and 50 per cent of its market value. You are paid out that share as capital, carry on living in the property, and pay the provider a monthly usage fee for as long as you alone continue to use the part you did not sell.
The usage fee repays nothing. It is a pure charge for the use of the share that now belongs to the provider — closer to rent on the sold part than to a loan repayment.
When the property is eventually sold in full — in your lifetime or by your heirs — the provider receives their share of the market value at that point, not of the original sale value. If the property has risen in the meantime, the payout to the provider rises with it. A completion fee is usually charged on that final sale as well.
A part-sale costs ownership, a loan costs interest
Borrowing against the property leaves you the owner of 100 per cent of it. The bank registers a charge on the title and pays out a loan you service with interest and repay to an agreed plan. The property stays wholly in your assets — every future gain belongs to you alone, not in part to a provider. On death it passes to your heirs in full, less whatever is still outstanding at that point.
The price of the loan is the interest on the capital paid out — a known, calculable cost. The price of the part-sale is the share of ownership given away together with its future growth — a cost that only shows itself at the sale, and in a strong property market can turn out markedly more expensive than a repayment over the same period.
The full comparison across all the release models — part-sale, lifetime annuity, reverse mortgage — is set out under equity release or remortgage.
Capital for a purchase abroad — without giving up a share
The most common reason owners reach us is not a wish for extra income in retirement but a concrete plan: a property in Spain or Portugal. Borrowing against the property at home creates the equity for it before anything is negotiated abroad — without handing over a share of that property and of whatever it gains from here.
What that structure looks like in practice is under using a German property as security, and the two halves of the purchase join up under equity from home.
The honest exception
A part-sale can make sense where a loan is no longer viable — for instance without an ongoing income able to carry a repayment, or with a property that is hard to value. In those cases it is one of the few remaining ways to release capital without selling the property outright.
Anyone who does have an ongoing income — a pension, rental or investment income all count — should at least have the loan route costed before giving up a share of ownership.
Frequently asked questions
What share of my property can I sell under a part-sale?
What happens to future value growth under a part-sale?
Can a part-sale be reversed later?
Who is better off borrowing against the property instead?
Can I use capital from a part-sale to buy abroad?
Have the loan route costed against a part-sale
Four figures are enough for a first assessment of whether a loan covers your capital requirement without giving up a share.
Read on
Equity release or remortgage
The full comparison: part-sale, lifetime annuity, borrowing against the property.
A German property as security
Up to 80 per cent of the lending value, for the purchase in Spain.