UK homeowners’ equity grows to record £5.7 trillion

Latest data reveals the average homeowner aged 55+ holds £321,213 worth of equity in property

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UK homeowners have seen their property wealth soar to £5.7 trillion, thanks to a strong house price recovery, according to the latest report from the Equity Release Council. 

The figure highlights the role property can play in shaping financial security. This includes the way it can help older homeowners considering equity release to fund their retirement or support younger generations.

A general property value increase is a positive development for those looking to unlock value from their homes. That’s because how much you can release is a percentage of your home’s value: the more your home is worth, the more you can typically release.

Over-55s hold lion’s share of property wealth

The Equity Release Council found that UK homeowners aged 55+ hold a large share of the country’s property wealth, with each owning an average of £321,213 in equity. 

According to government data, more than half (55%) of homeowners in England are over 55, with 76% of this age group owning their home outright without a mortgage. Altogether, over-55s own more than £3.4 trillion in property wealth.

While the wealthiest areas tend to be in southern England, every part of the UK has older homeowners with significant property wealth, showing how important our homes are for financial security in retirement.

Property wealth can play an important role in a comfortable retirement

For those considering equity release, a growth in home values offers the option of a greater cash boost in later life. Homeowners aged 55+ may be able to access tax-free cash while still retaining ownership of their home with a lifetime mortgage or home reversion plan.

Jim Boyd, CEO of the Equity Release Council, emphasised the importance of property wealth in financial planning, saying:

“Our findings make it crystal clear that your prospects of living comfortably in retirement will rest on firmer foundations if you own your own home and include property wealth in your financial plans.

“Spare funds aren’t easy to come by in the current climate, either for households or for government, so it’s vital that we help older homeowners consider the role that the £3.4 trillion worth of property wealth can play in later life finances.”

This growth in property wealth may encourage more homeowners to explore how equity release could fit into their long-term financial strategies. By unlocking a portion of this increased equity, some may find it an effective way to enhance their quality of life in retirement.

Of course, there may be other options open to older homeowners seeking extra cash as a lump sum or income. These might include remortgaging and downsizing, for example. Anyone considering equity release should look at the alternatives before going ahead with a plan. Thankfully, professional equity release advice should include a proper review of all the options open, as well as equity release itself.   

Read more about using equity release to enjoy a better retirement in our article “3-in-5 homeowners expect property wealth to fund retirement”.

Speak to a specialist

If you are 55+ and would like to utilise some of your property wealth to boost your finances, make sure you speak to our selected advisers.

They will take the time to explain everything to you about the different types of plans, and help you compare equity release rates. They will also make sure you understand all the pros and cons, such as how an equity release plan will reduce the value of your estate. Contact our friendly team at 0808 178 3055 or request a call back here.

Source:

UK property wealth has reached a record £5.7tn: House price recovery boosts UK homeowners’ equity to a record £5.7 trillion. Equity Release Council. Accessed 07 October 2024.

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