£381bn in potential equity release available to over-55s

The amount of potential equity available within older UK homeowners’ properties soared to more than £381bn at the end of 2019, according to new research by Canada Life.

Canada Life’s analysis, based on public data for UK property homeownership and the latest Nationwide Building Society house price figures, revealed that compared to the fourth quarter of 2018, there is more than £1bn more in equity available to UK homeowners aged 55 and over.

Average house prices in the UK have grown by 1.4% year-on-year, according to the latest Nationwide Building Society house price data, which has increased the overall equity currently stored in UK properties.

Canada Life’s latest research comes after the over-55s specialist adviser, Key, published research last week revealing that retired homeowners released more than £3.4bn of property wealth in 2019.

Canada Life head of marketing, Alice Watson, said the latest data suggested ‘bigger potential’ for people looking to tap into their property wealth.

“Advisers we’ve spoken to predict the market will grow to above £5bn in 2020, and with house prices increasing, there’s an opportunity for over-55s to boost their retirement lifestyles using the value in their properties,” Watson commented.

“Our own data shows that people use equity release products for everything from home improvements and holidays, to everyday expenses. The rising costs of living, combined with increased property prices, mean that over-55s will need to continue to view their wealth holistically and recognise the role that property wealth can play in providing retirement income.

“The growth in property prices has also led to children and grandchildren looking to family and friends to help them get on the housing ladder. This is supported by research conducted by Canada Life, which revealed that advisers believe 59% of equity release customers in 2020 will use the product in this way, suggesting clients are looking for innovative ways to support their relatives to buy their first home.

“With more equity now available, homeowners will have greater opportunity to use their property wealth to offer financial support to their family, without needing to downsize their homes.”

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