More than £600bn of equity was available for equity release in UK homes during the fourth quarter of 2020, according to analysis from Canada Life.

The retirement expert revealed this was an increase of £15bn based on the previous quarter, with Q4 also marking the first time the figure has ever exceeded the £600bn milestone.

Canada Life suggested that higher house prices across the South West, South East and London have driven the surge in potential available equity.

A property in London is now reaching an average price of £519,000, creating £117bn of potential equity for the region, or £153,199 per household – the largest available in the UK. The research showed this was closely followed by the South East which now has £116bn of potential equity, or £102,492 per household.

Property prices in the South West and in Wales have also witnessed the largest percentage growth in house prices in Q4, growing by 3.6%. Canada Life found that the South West now has almost £60bn of equity available, or £76,932 per household, while in Wales there is over £20bn of potential equity release available, worth £53,128 per household.

According to the analysis, homeowners in the North East and Scotland had the least amount of equity available, with £43,773 and £52,019 per household respectively.

“The world is changing around us and many homeowners are seeing an increasing strain on their personal finances,” said Canada Life head of marketing, insurance, Alice Watson. “In these cases, property wealth may serve as an important source of later life funding.

“The diverse nature of equity release products mean that they can be used to meet a range of evolving needs, while offering a combination of certainty and flexibility.

“The substantial concentration of wealth in UK property and our increasingly competitive product LTVs means there’s now more equity available to release for those looking to access money from their home. As a result, equity release could play an even greater role in retirement as the over-55s look for financial security in later life.”

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