The average over-55 owner-occupied household in the UK has £321,213 of equity in their home, research reveals.
More than half (55%) of homeowners in England are aged 55+ and 76% of over-55s own their own home, according to Equity Release Council data.
While the most property-rich regions are in the south of England, every UK nation and region in the UK has significant property wealth among its older population, which adds up to more than £3.4tn.
National equity breakdown
In total, the nation’s property equity has soared to a record high of £5.7 trillion, due to rising house prices in the first half of this year.
Total UK mortgage debt of £1.6tn compares with an overall property market value of £7.3tn.
This gives an average loan-to-value (LTV) of 22.2%, with the remaining 77.8% of the housing market effectively owned in equity or cash.
The average LTV has dropped from 28.9% 10 years ago, said the Equity Release Council.
Asset rich, cash poor
For households, the £321,213 of equity in the average UK over-55 homeowner’s property is worth almost 10 times the average pensioner couple’s annual net income of £38,168.
The Council said that this contrast highlights ‘how private property wealth can play both a personal and policy role to help meet later life living costs and welfare needs for the UK’s ageing population’.
Jim Boyd, CEO of the Equity Release Council, explained: “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.
“Whether it is boosting income, managing unsecured debt, paying for care or helping to get family members onto the property ladder, there is a huge amount of potential tied up in bricks and mortar.
“We urge the new Government to look beyond pensions to improve retirement incomes and stimulate the economy. There is a compelling need for Government to set out its vision for property wealth in later life funding: a thriving later life mortgage market can help to achieve both of these outcomes.”
Mark Gregory, founder and CEO of Equity Release Group, added: “With nervousness about the upcoming Autumn Statement, and the implications it may have on those planning their retirement, many people are looking for alternative ways to help fund their retirement plans.
“The figures shared by the Equity Release Council can provide some reassurance to homeowners, some of which may be impacted by the changes being proposed to pension tax, the winter fuel allowance and inheritance tax.”
