Equity release: Birmingham Market Update

Properties in Birmingham worth almost £100k more than ten years ago

The value of properties in Birmingham has shot up in the last decade, with the average home in the city now worth £98k more than 2013. That means homeowners can access much more cash with equity release than would have been possible just a few years ago. 

With property prices soaring in the region, the Equity Release Council reported a significant boom in equity release sales across the West Midlands from 2017 – 2021, with 31% more activity over the four year period.

The record equity release sales recorded in 2022 indicate that Birmingham homeowners have been making the most of their growing property wealth to enjoy a better retirement. 

If you are curious about how much you could unlock, or how to go about arranging equity release in Birmingham, make sure you read this guide. We’ll be discussing:

• What is equity release?
• Average Birmingham property value rises by £98k in ten years
• Land Registry analysis of Birmingham house prices
• Birmingham homeowners could unlock up to £39k more than in 2013
• What are the main types of equity release?
• Am I eligible for equity release in Birmingham?
• How can I arrange equity release in Birmingham?

We hope this article will be a helpful introduction into arranging equity release in Birmingham. If you’re thinking about unlocking your property wealth then you can’t beat specialist advice, so for further information and guidance please contact our friendly team of selected equity release advisers.

Simply call us on 0808 178 3055 or request a call back and we’ll arrange a no-obligation appointment with an adviser for you. Or click here to find out how much you could unlock from your home with our free online tool.

What is equity release?

Equity release enables homeowners who are 55+ to boost your later life finances by accessing your property wealth, but without having to remortgage or downsize your home. The money you release is tax-free and can be used to clear your mortgage, loans or credit cards, make home improvements, take more holidays, gift money to your family and much more.

A significant benefit to equity release is that you don’t have to make any monthly payments after borrowing on your home. Instead, the interest can be left to roll up until you pass away or move into long-term care. At this point your home is usually put up for sale to repay your loan plus any interest. 

You can read about the different types of equity release plans, and look at some examples of equity release to see how it is helping UK homeowners to achieve their financial goals.

If you want to know more about your options and how much you could release, call us on 0808 178 3055 or request a call back. Our selected advisers will be happy to give you all the guidance you need.

Average Birmingham property value rises by £98k in ten years

Latest data shows that homeowners in Birmingham are likely to have far more equity in their properties now than when they bought them. If you have been a homeowner in the city for a few years now then equity release may enable you to access some of your property wealth without having to move. 

Of course, the more your property is worth, the more cash is generally available for you to unlock. With that in mind, our analysis of Birmingham equity release will begin with a more detailed breakdown of property prices in the city over the last decade.

In 2022 the UK saw record-breaking average house prices. In Birmingham alone, average prices jumped from £206,866 to £231,451 in the 12 months between 2021 and 2022.

Whilst the market has slowed since, Birmingham homeowners have still seen their overall average house price increase by £98,283  over the last decade – that’s a 72% growth. 

This compares to the average UK home, which has risen by £115,618k over the last ten years – or a 65% growth. It means house values have grown at a faster rate in Birmingham in the last decade than the rest of the UK.

The table below demonstrates how the average home in Birmingham has consistently increased in value every year since 2013. You can also see how much house prices here compare to the average home in the UK.

SOURCE: Land Registry House Price Statistics in Birmingham Sept 2013–2023.

Birmingham homeowners could unlock £39k MORE than in 2013

If you have owned a property in the city of Birmingham for some years with little or no mortgage then you potentially have a large amount of equity sitting there now. 

Selling the family home to access your equity may not be practical though. You might not be ready to downsize or move to a less expensive area just yet. Or perhaps you live close to your family and friends and have concerns about moving further away from your support network.

With equity release, you can access some of the tax-free money from your home without having to move house. You won’t even have any mandatory monthly loan repayments. 

Curious to know how much you could release from your home in Birmingham? Equity release plans typically allow you to unlock up to 50% of your home’s value, though this depends on your age and individual circumstances.

The table below gives an example of how much tax-free cash a typical 74-year-old living in Birmingham might have been able to release from their home through equity release over the last decade:

(The above figures are based on a typical 74-year-old releasing 40% of the total value of their home in Birmingham with a standard lifetime mortgage.)

Thanks to the huge increase to house prices in the city, a typical 74-year-old living in Birmingham could potentially unlock up to £19,062 more cash today than five years ago.

The good news is that if you have owned your home for ten years or more then the figures could be even more impressive for you. 

The above example reveals that a 74-year-old Birmingham homeowner could unlock £39,214 more tax-free cash from their home than they could have done ten years ago.

What are the main types of equity release?

For over-55s currently considering equity release, Birmingham homeowners can choose between a lifetime mortgage or a home reversion plan.

Lifetime mortgages

The most popular type of plan, a lifetime mortgage offers more choice plus you will continue to own 100% of your home. Here are just some of the features to choose from:

• Interest-only lifetime mortgage. Make regular payments to pay off all or some of the interest on your plan. This option can prevent your loan from growing in size.
• Drawdown lifetime mortgage. You don’t have to take all of your available funds in one go. Instead, you can access an initial lump sum now, then ‘draw down’ further funds in the future when you need to. Interest only applies to the funds you access, so it can save you potentially thousands of pounds in interest.
• Downsizing protection. By building this feature into your plan, you can sell your home and settle your plan if your spouse/partner passes away or moves into long-term care before you.
• Enhanced lifetime mortgage. If you have a qualifying medical condition such as high blood pressure, diabetes or a history of cancer or heart attacks, for example, then you could unlock more money from your home or access lower interest rates.

Home reversion plan

If you are a homeowner aged 60+ then you may be able to release more money from your home with this type of plan. 

It differs to a lifetime mortgage as you sell all or a percentage of your home to a reversion company in exchange for a tax-free cash lump sum or regular income. 

You then continue to live in your home rent-free with the same rights as a tenant. When you pass away or move into long-term care, your home is sold and the reversion company can take their percentage of the sale price. 

Am I eligible for equity release in Birmingham?

To be considered for equity release, Birmingham homeowners must typically:

• Be 55 or over (both of you if making a joint application).
• Have a home in the UK worth £70,000 or more.
• Be mortgage-free or have a small mortgage that can be paid off by the money you release.

If you meet the above criteria then you can use our free online equity release calculator to see how much you could unlock from your home.

Not yet 55? You may still be able to access some of your equity. Read how in our article: “How to release equity if you are under 55.”

How can I arrange equity release in Birmingham?

For free, specialist guidance on equity release, Birmingham homeowners can get in touch with our selected advisers through our friendly team.

For your peace of mind, all the advice and quotations you receive will be given free of charge. In fact, you only receive a fee for advice if you choose to go ahead with a plan, which can be paid from the money you unlock.

Please call 0808 178 3055, or request a call back for a time that suits you. Alternatively, you can use our free equity release calculator to see how much you could unlock.

Think carefully before securing further debts against your home.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn