Equity available in British homes increased to new highs of £730 Bn

Image of Equity available in British homes increased to new highs of £730 Bn.

Shifting the retirement planning landscape

Equity release is an umbrella term for a range of products which allow homeowners to access the cash tied up in their property. Anybody aged 55 and over can release equity from their residential property without having to make monthly payments. There are two principal types of equity release products – Lifetime Mortgages and Home Reversion Schemes.

New research shows that a record £730 billion of equity was available for release in British homes in Q2 2021. House prices rose 13.2% in June, the highest level since 2004. Property prices in Yorkshire, the South West and the North West grew notably in Q1 by 3.9%, 3.7% and 3.4%.

There is a strong relationship between house values and the value of how much equity is available across the UK. If we break the latest potential equity value available down by region, the South East has the highest potential for equity, equating to £140bn. London followed closely and has £136bn of potential equity.

Principal trends that have made equity release more popular include:

  • Less access to promising pensions;
  • Increased life expectancy;
  • House prices have risen dramatically;
  • Fluctuations in low interest rates, which affects retirement income;
  • The pension age is set to increase;
  • Increased diversification of assets;
  • Record low mortgage rates;
  • The proliferation of “Bank of Mum and Dad”;
  • Deregulation of borrowing during retirement;
  • Increased acceptance in continuing to carry mortgage debts in later years;
  • Older generations are increasingly becoming asset rich and cash poor

Later Life Lending: Unlock wealth from your home

Property wealth is increasingly being used as another source of retirement income, bolstered by any existing savings. According to the Equity Release Council’s latest report (ERC) increased awareness around equity release products means that now 57% of homeowners have equity release on their horizon. According to the Equity Release Council’s  latest report, a large majority (475%) of equity release products are taken out by individuals between 60 to 69 years of age.

Equity release plays a vital part in retirement planning. Releasing cash means that in retirement you can benefit from the flexibility of releasing cash for any purpose, without having to move home. In some instances, equity release has been used to improve their general standard of living or to help family and friends. Pensioners are now finding that they don’t want to slow down and improvements in healthcare means that pensioners are more active and have a stronger sense of wellbeing.

Equity release helps today’s homeowners live the retirement they’ve worked long and hard for. The impact is that homeowners are benefitting financial wellbeing improving pensioners state of wellbeing. Unlocking property wealth will play a critical role in retirement planning, both now and in the years to come.

Flexible equity release products

largemortgageloans.com panel of lenders has huge breadth, with a number of lenders who provide flexible products which can be manually underwritten and tailored to the needs of older lenders.

Using a range of lending contacts and specialist experience we provide a tailored solution and have arranged multi-million-pound equity release products. If you would like to find out more, click here to download our helpful guide on equity release and later life lending. Every situation is unique and the best advice you will receive is by getting in contact with one of our fully qualified Equity Release advisers.

These products are highly regulated for the protection of borrowers by the Financial Conduct Authority, Prudential Regulations Authority and Equity Release Council.

Call 0207 519 4900 or email enquiries@largemortgageloans.com and speak to one of our friendly, equity release regulated advisers today.

Your home or property may be repossessed if you do not keep up repayments on your mortgage. Home reversion plants and lifetime mortgages are complex products. To understand the features and risks, ask for a personalised illustration. Equity release will reduce the value of your estate and may leave nothing to pass on as an inheritance. A cash lump sum or income from an equity release scheme may reduce the borrower’s eligibility to state benefits.

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Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Changes in the exchange rate may increase the sterling equivalent of your debt. You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing any other debts against your home.  

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