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Equity available in UK homes exceeds £600bn

More than £600 billion of equity was available for release in UK homes in Q4 2020, the first time it has exceeded this milestone, analysis from Canada Life today reveals. This is an increase of £15 billion based on the previous quarter. The figures, based on the latest Halifax quarterly regional house price index, reveal that the total amount of housing equity available to homeowners aged over 55 now stands at an estimated £600.5 billion1.

Higher house prices across the South West, South East and London have driven this surge in potential available equity. A property in London is now reaching an average price of £519k, creating £117bn of potential equity for the region or £153,199 per household. The largest available in the UK. 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%. The South West now has almost £60bn of equity available, or £76,932 per household. While in Wales there is over £20 billion of potential equity release available or £53,128 per household.

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

Alice Watson, Head of Marketing, Insurance, Canada Life said:

“The world is changing around us and many homeowners are seeing an increasing strain on their personal finances. 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 loan-to-values (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.”

 

Full regional breakdown of available equity:

Region

 

Potential equity release value available

Potential equity release value per household2

Scotland

£36.0 bn

£52.0K

North East

£15.1 bn

£43.8K

Yorkshire and The Humber

£34.5 bn

£51.9K

North West

£49.7 bn

£55.9K

East Midlands

£37.0 bn

£61.4K

West Midlands

£44.7bn

£63.7K

Wales

£22.1 bn

£53.1K

East Anglia

£68.2bn

£87.4K

South East

£116.5bn

£102.4K

South West

£59.4bn

£76.9K

London

£117.1bn

£153.2K

Q4 Total

£600.5bn

£802K

 

 

  1. Source: Property values listed are based on Halifax’s quarterly house price index. The potential equity release value has been calculated using the maximum loan to value (as of October 2020) for a 70 year old for Canada Life’s Capital Select Super Lite product based on the average regional house price and ONS population statistics. This has then been weighted based on the English Housing Survey’s property ownership figures for those aged 55 or over - this was then applied to each region to calculate the proportion of properties owned by those aged 55 or over.
  2. Numbers have been rounded - please ask for a full breakdown