According to an analysis by the ERC, this surpassed the previous high of £5.6 trillion in 2022 when the housing market was buoyed by pent-up demand after the pandemic
The total value of the UK’s property equity hit £5.7 trillion in the first half of the year due to recovering house prices, finds a research.
According to an analysis by the ERC, this surpassed the previous high of £5.6 trillion in 2022 when the housing market was buoyed by pent-up demand after the pandemic.
The report continued that total UK mortgage debt of £1.6 trillion compared with an overall property market value of £7.3 trillion.
The Equity Release Council said this gives an average LTV of 22.2%, with the remaining 77.8% owned by equity or cash.
ERC said the average loan to value has declined from 28.9% 10 years ago, so for every £10,000 of property owned, £7,220 is supported by cash, therefore mortgages only cover a small share.
The Equity Release Council’s analysis found that the average over-55 owner-occupied household in the UK has £321,213 of equity in their home.
The average amount of equity for an over-55 owner-occupied household in England stands at £340,676, and comes to £214,743 in Scotland, £240,436 in Wales and £206,417 in Northern Ireland.
From a regional perspective in England, London has the highest average equity at £583,618, followed by the South East at £426,749 and East of England at £378,686.
The total amount of property wealth among over-55 homeowners came to £3.4 trillion.
The average equity of £321,213 in the over-55 category is worth nearly 10 times the average pensioner couple’s annual net income of £36,168.
The Equity Release Council said the contrast showed 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.
It said older households had been hit hard by post-pandemic inflation and faced losing their winter fuel payments as the government looks to bring in means-testing.
The trade body said lifetime mortgages could allow over-55s to access the equity tied up in their property, adding that the product was highly regulated and could only be sold with advice. It also has additional safeguards such as no-negative equity guarantees and guaranteed tenure for life.
