Protecting your home from care fees in London

By · Published 2025-11-13 · Last reviewed 2026-09-18

A smiling older couple pose cheek to cheek in a sunny garden.
Photo: Stannah International, CC BY 2.0

London homeowners can protect a home from care fees only within the rules. The home is ignored for care at home, for 12 weeks after a permanent care home move, and while a partner or qualifying relative lives there. A deferred payment agreement can delay a sale, and couples can use wills with trusts. Giving the home away to avoid fees risks being treated as deprivation of assets.

In London, a family home is often worth many times the capital limit, so if it counts in a care assessment, the resident will almost always pay the full cost of care. But the home does not always count. It is ignored when care is provided at home, for the first 12 weeks after a permanent move into a care home, and for as long as a partner or certain relatives live there. A deferred payment agreement can also stop a forced sale.

The rules are the same across England, and each London borough council carries out its own assessments. This guide explains the legitimate options and the risky ones. It is general information: take advice from a specialist solicitor or regulated financial adviser before making any decision about property.

When does a home count towards care fees?

The NHS guide to the financial assessment explains that the value of the home is not included if the person receives care at home, or has only a short stay in a care home. For a long-term care home stay, it is included unless certain people still live there.

In detail, the Care and support statutory guidance (Annex B) says the home must be ignored:

The council may also choose to ignore it in other cases, for example where a carer who gave up their own home to look after the resident lives there.

If none of these applies, the home's value (less 10% for selling costs and any secured debts) counts as capital. With London property values, that usually means paying the full fee.

Can a deferred payment agreement help?

Yes. A deferred payment agreement (DPA) means the council pays the care home and puts a legal charge on the property. The money, with interest and any administration fee, is repaid later, usually when the home is sold, often after death.

The council must offer a DPA if your relative is in, or moving to, a care home, their home is not disregarded, and their other savings and assets are below the upper capital limit. It can also offer one in other cases. How much can be deferred depends on the value of the property, so the high value of many London homes can support a long placement.

A DPA gives the family time: to sell when the market suits, to rent the property out, or to keep it for as long as possible.

What can couples do?

While both partners are alive

If one partner moves into a care home and the other stays at home, the home is ignored for as long as the partner lives there. Only the resident's own savings and income are assessed.

Planning for the second death

Many couples own their home as joint tenants, so it passes automatically to the survivor. If the survivor later needs care, the whole home may count.

Some couples choose instead to own the home as tenants in common and leave each share by will into a trust, often a life interest trust, with the survivor able to stay there. The first partner's share then does not belong to the survivor. GOV.UK explains the difference between joint tenants and tenants in common. This is will planning, not a gift during life, and it protects only the first share. Take advice from a solicitor.

What about renting out the home?

Renting the home out can help pay care fees without selling. Rent received is taken into account in the financial assessment, and the home itself still counts as capital unless a disregard applies, so for a self-funder the main benefit is cash flow while keeping the property. Landlord responsibilities and tax apply, so get advice.

Is giving the home to the children a good idea?

Usually not, if the aim is to avoid care fees. If a council decides that avoiding care charges was a significant reason for a transfer, and the need for care was foreseeable, it can treat the person as still owning the home. This is deprivation of assets, and there is no fixed time limit in England. The seven-year rule belongs to inheritance tax, not care fees.

The statutory guidance lists transferring the title deeds and putting assets into a trust that cannot be revoked as examples that may amount to deprivation. Age UK's guide to deprivation of assets explains how councils decide.

Giving the home away also has other risks: the parent loses security, the property could be affected by the child's divorce, debts or death, and there may be tax consequences.

Could the NHS pay instead?

If your relative's needs are mainly health needs, they may qualify for NHS Continuing Healthcare, which pays the full cost of care and is not means-tested. In that case the home is irrelevant to the cost of care. Ask for a checklist assessment if needs are complex.

What should London families do first?

  1. Ask the borough council for a needs assessment.
  2. Work out whether any property disregard applies, now or in future.
  3. If the home will count, ask about a deferred payment agreement during the 12-week disregard.
  4. Ask about NHS Continuing Healthcare if health needs are significant.
  5. Review ownership and wills with a solicitor, especially for couples.
  6. Get regulated financial advice before selling, renting or releasing equity.

Frequently asked questions

Will I have to sell my London home to pay for care?

Not necessarily, and not straight away. The home is ignored for care at home, for 12 weeks after a permanent move, and while a partner or qualifying relative lives there. A deferred payment agreement can delay a sale until after death.

Can I transfer my home to my children now to protect it?

You can, but if avoiding care fees was a significant reason and care needs were foreseeable, the council can treat you as still owning it. There is no fixed time limit, so take legal advice first.

Does it help that London property is so expensive?

It makes little difference to whether the home counts: if it does, the resident will almost certainly be above the capital limit. It can make a deferred payment agreement last longer.

Do different London boroughs apply different rules?

The national rules are the same, but each council sets its own procedures, charging policy for care at home, and fees for deferred payment agreements. Check with the council where your relative lives.

Does equity release protect the home?

No. It releases money from the home to spend, with interest building up. Any loan secured on the home reduces its value in the financial assessment, but spending the money quickly to avoid fees could be treated as deprivation.

Key takeaways