The value of homes in the UK has been on the rise, and that’s good news for homeowners, especially those approaching retirement. According to the Equity Release Council, the total value of property equity in the UK has hit a record high of £5.7 trillion. That’s more than the £5.6 trillion reached back in mid-2022, when the housing market was booming after the pandemic.
A Growing Pot of Money
This means that the average homeowner over the age of 55 has £321,213 of equity tied up in their property. That’s a significant amount of money, especially in a time when many pensioners are struggling with the rising cost of living.
Let’s break it down: Imagine your home is worth £10,000. You only owe £2,280 on your mortgage, leaving you with £7,720 in equity. That’s a lot of potential for you to tap into if needed.
Where’s the Wealth?
This property wealth isn’t spread out evenly. The south of England has the highest concentration of property wealth, but every region in the UK has a significant amount of equity locked up in homes owned by older people. In total, over-55s in the UK own more than £3.4 trillion worth of property.
Here’s a breakdown of average property wealth per over-55 homeowner household:
- UK: £321,213
- England: £340,676
- South East: £426,749
- London: £583,618
- Scotland: £214,743
- Wales: £240,436
Your Home: More Than Just a Place to Live
This record property wealth presents a huge opportunity for people approaching retirement. It could provide a vital safety net for those who need to boost their income, manage debt, or pay for care.
But it’s important to remember that accessing your property wealth is not always straightforward. You can’t simply sell your home and move into a smaller place. There are specific, regulated plans available called Lifetime Mortgages that allow homeowners over 55 to access their equity safely and responsibly.
Government Needs to Act
The Equity Release Council believes that the government needs to acknowledge the importance of property wealth in later life financial planning. They’re calling for the government to create a vision for how property wealth can be used to help people in retirement, improve income and boost the economy.
What You Need To Know
If you are approaching retirement, it’s important to start planning now. Talk to a qualified financial advisor to discuss your options and find out how your home can become a valuable resource for your future.