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Equity available in UK homes soars to £600bn

There was almost £600 billion of equity available for release in UK homes in Q3, an increase of £100 billion from Q2 this year, analysis from Canada Life today reveals. 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 £591 billion1.

 

An increase in loan to values (LTVs) across Canada Life’s product range and a marginal increase in house prices can be attributed to the rise in the amount of equity available.

 

Higher house prices result in the South East having the highest amount of potential equity available, standing at £123bn - £107,966 per household. This is closely followed by London, with £114bn (£148,909 per household), and the South West, where there is £62bn (£80,032 per household) in equity available to homeowners over the age of 55. In contrast, homeowners in the North and Scotland had the least amount of equity available, with just £43,042 and £48,063 per household respectively. 

 

Alice Watson, Head of Marketing, Insurance, Canada Life said: “Property wealth continues to be an increasingly important source of later life funding, whether it's used to finance home improvements, support family members or improve quality of life in retirement. 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.

 

“The diverse nature of equity release means that it can be used to meet a range of evolving needs, while offering a combination of certainty and flexibility to suit client’s individual circumstances.”

 

Full regional breakdown of available equity:

 

Region

Potential equity release value available

Potential equity release value per household2

Scotland

£33.3 bn

£48.1K

North

£14.9 bn

£43.0K

Yorkshire and The Humber

£33.0 bn

£49.7K

North West

£49.1 bn

£55.2K

East Midlands

£37.9 bn

£62.9K

West Midlands

£45.8 bn

£65.3K

Wales

£23.7 bn

£56.9K

East Anglia

£55.3 bn

£70.9K

South East

£122.7bn

£108.0K

South West

£61.8 bn

£80.0K

London

£113.8 bn

£149.0K

Q3 Total

£591.4bn

£789K

 

  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