Equity Release: Portsmouth market update

Properties in Portsmouth worth £101k more than ten years ago

The cost of properties in Portsmouth has soared in the last decade, with the average home in the city now worth over £101,000 more. With property prices soaring here, equity release sales rose by 13% in the city and across the rest of the South East between 2017 – 2022 according to the Equity Release Council.

The figures certainly suggest that Portsmouth homeowners made the most of their additional property wealth to give a boost to their finances.

If you would like an idea of how much homeowners are unlocking, how property values in the area differ by property type, or how to go about arranging equity release in Portsmouth, make sure you read this guide. We’ll be discussing:

• What is equity release?
• Why are house prices important to equity release?
• Average Portsmouth property value rises by £101k in ten years
• Land Registry analysis of Portsmouth house prices
• Portsmouth house prices and property types
• Portsmouth homeowners could unlock up to £40k more than in 2013
• What are the main types of equity release in Portsmouth?
• Am I eligible for equity release in Portsmouth?
• How can I arrange equity release in Portsmouth?

We hope this article will give you a good introduction into arranging equity release in Portsmouth. Nothing beats specialist advice though, so for further information and guidance, please do get in touch with our friendly 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 is a way for homeowners who are 55+ to access some property wealth without having to remortgage or downsize to another home. The money you release can be used to clear your mortgage, loans or credit cards, update your home, book a holiday, help your family financially 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 see some examples of equity release and 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 help you need.

Why are house prices important to equity release?

According to the most recent property data, homeowners in Portsmouth are likely to have considerably more equity in their properties now than when they bought them thanks to growing house prices. This is particularly the case for those who have owned their own home in the city for 5+ years.

When you request an equity release quotation to explore how much money you could unlock, your property price will be one of the factors providers will consider. Typically, the higher your property is worth, the more cash is available to unlock. 

That’s why our analysis of Portsmouth equity release starts with a deeper dive into how property prices in the city have performed over the last decade.

Average Portsmouth property value rises by £101k in ten years

In 2022 the UK enjoyed record breaking average house prices – no doubt a contributing factor to the record sales seen by the equity release industry in the same year. 

Of course, the property market has slowed since its peak, but despite this, Portsmouth homeowners are still enjoying huge boosts to their property prices. The average home in the city has risen by £101,420  in the last decade alone. That’s a huge 65% growth.

The table below demonstrates how the average home in Portsmouth has risen in value since 2013. You can also see how much house prices here compare to the average home in the UK, which remains slightly elevated next to Portsmouth prices.

SOURCE: Land Registry House Price Statistics in Portsmouth , Oct 2013 – 2023.

Portsmouth house prices and property types

Of course, values differ massively depending on the type of house you have. For instance, a 4-bed detached home is more likely to have a higher amount of equity available to release than a flat. To get a better idea of your own property’s value, let’s take a look at specific property types in Portsmouth. 

According to property selling site Zoopla, the average price for houses that have actively been sold in the last 12 months in Portsmouth is £273,014. 

Detached homes in Portsmouth are selling for an average of £480,393 according to Zoopla, whilst semi-detached homes are closer to £343,466. The average terraced house sold for £271,536, whilst flats are going for an average of £180,686.

You might notice that Zoopla’s figure is slightly up on the Land Registry’s average Portsmouth house price of £256,450. One potential reason for this could be that people spend money to improve their homes before listing them, in order to achieve a higher asking price.

Portsmouth homeowners could unlock up to £35k MORE compared to 2013

If you have owned a property in the city of Portsmouth for some years with little or no mortgage then you potentially have a large amount of equity available to unlock. 

Curious to know how much you could release from your home in Portsmouth? Equity release plans typically allow you to unlock between 20-60% 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 Portsmouth 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 Portsmouth with a standard lifetime mortgage.)

The data shows that a 74-year-old living in an average Portsmouth home worth £256,450 could potentially unlock up to £102,580 with an equity release plan.

That’s up to £17,388 more cash than they might have been offered five years ago, assuming the same loan-to-value (LTV).

There are so many happy memories in a family home that you’ve lived in for years, even decades. If you’re lucky enough to have owned your home for a long time then the figures could be even more impressive for you, should you choose to unlock money from it.

The above example reveals that a 74-year-old Portsmouth homeowner could unlock £40,568 more tax-free cash from their home than they could have done ten years ago. That’s £40k extra tax-free cash simply for living in your home for a decade.

How else is the cash release amount calculated?

Equity release calculations look at other factors in addition to the value of the property, though it is an important factor. For instance, as you get older you can usually unlock a higher percentage of your home’s value.

Equity release providers will also consider the property type, condition and the location of your home. You may even find that you can release more money due to your health or lifestyle. 

This is because enhanced plans are available to people with poor health or those who have a history of smoking for example. If you qualify then you may be able to unlock a higher amount, or access a more competitive interest rate. 

Am I eligible for equity release in Portsmouth?

To be considered for equity release, Portsmouth homeowners must:

• 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 which can be paid off by the money you release.

To check your eligibility, use our free online equity release calculator and find out approximately how much you could unlock from your home.

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

What are the main types of equity release in Portsmouth?

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

Lifetime mortgages

These are the most popular type of equity release plan as there are more options to choose from and you will continue to own 100% of your home. Some of the choices you have are:

• Interest-only lifetime mortgage: This allows you to make regular payments to pay off all or some of the interest to prevent or reduce interest from accruing on your loan.
• Drawdown lifetime mortgage: Instead of taking all of your available cash in one go, you can access an initial lump sum at the start, then ‘draw down’ further funds as and when you need to. This can save you potentially thousands of pounds over the life of your plan.
• 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.
• Enhanced lifetime mortgage: If you have a qualifying medical condition or lifestyle factor then you could unlock more money from your home or achieve lower interest rates. 

Home reversion plan

Available to homeowners who are 60+, you may be able to release more money from your home with this type of plan. 

Instead of borrowing the money and accruing interest, 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 live in your home rent-free with the same rights as a tenant. When you pass away or move into long-term care then your home is sold and the reversion company can take their percentage.

How can I arrange equity release in Portsmouth?

For specialist guidance on equity release, Portsmouth homeowners can get in touch with our selected advisers by calling our friendly team.

We want you to have all the information you need to make the right decision for you, so all the advice and quotations you receive will be given free of charge. You’ll only pay a fee for advice if you choose to go ahead with a plan, though this can usually be paid from the money you release from your home.

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.

Remember, equity release will reduce the value of your estate and the amount of inheritance you leave. Think carefully before securing other 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