PR 2880X1040 0009
Close / Return

Equity available in UK homes reaches new high of £740bn

  • All UK regions see growth as available equity grows by another £10bn since Q2
  • Londoners see small decline in house prices (-0.1%) but still have the largest amount of equity available to release per household
  • Scotland sees largest quarterly house price growth of 2.8%

 

Over £740 billion of equity was available for release in UK homes in Q3 2021, the first time it has exceeded this milestone. This is an increase of over £10 billion when compared to the previous quarter, according to analysis by Canada Life. 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 £740.5 billion1.

 

The average price of a property in the South East is now £360k, creating £143bn of potential equity for the region, the largest available equity by region in the UK. This was closely followed by London which now has £136bn of potential equity. Property prices in Scotland, the East Midlands and East Anglia saw the largest growth in Q3, growing by 2.8%, 2.4% and 2.2% respectively. Scotland now has over £45bn of potential equity available, or almost £66k per household. In the East Midlands there is now over £46bn available, equating to over £76k per household and in East Anglia almost £85bn of available equity leads to £108k available to release per household.

 

House prices in the North West saw no change after increasing by 3.4% the previous quarter, while London actually saw a small decline of -0.1% bringing the average house price down by just over £500k to £510.5k.

Despite this, London still enjoys the highest levels of average equity available at £178,680 per household. London is followed by the South East (£126,278) and East Anglia (£108,732).

 

Homeowners in the North East, and Yorkshire had the least amount of equity available, with £54,489 and £65,385 per household respectively.

 

Alice Watson, Head of Marketing, Insurance, Canada Life said: “With the exception of a very minor decline in London, house prices are continuing their almost relentless growth across Britain which we can see mirrored in the available equity. As a result, households across the nation are looking at property wealth in a different way. To see them as a contributing part of their retirement income rather than a completely separate asset. 

 

“The diverse nature of equity release products mean that they can be used to meet a range of evolving needs. Whilst releasing equity from a property remains a very significant and individual decision it has a valuable role to play in helping today’s homeowners live the retirement they’ve worked long and hard for. With the right advice, equity release has proven it can help people to access their property wealth flexibly and safely.”

 

Full regional breakdown of available equity:

 

 

Region

 

Potential equity release value available

Potential equity release value per household2

Scotland

£45.6 bn

£65.9k

North East

£18.8 bn

£54.4k

Yorkshire and The Humber

£43.4 bn

£65.3k

North West

£62.8 bn

£70.6k

East Midlands

£46.3 bn

£76.8k

West Midlands

£55.3 bn

£78.8k

Wales

£28.3 bn

£68.0k

East Anglia

£84.7 bn

£108.7k

South East

£143.5 bn

£126.2k

South West

£74.6 bn

£96.6k

London

£136.6 bn

£178.6k

Q3 Total

£740.5 bn

£990.6k

 

 

  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