Uk housing stock value hits record £7 trillion

Uk housing

As a result, property owners have gained the equivalent of £46,000 equity per household since the summer of 2020

The overall valuation of UK housing stock has hit a record £7 trillion after annual house price growth reached 12.8% in May 2022, according to the Equity Release Council (ERC).

As a result, property owners have gained the equivalent of £46,000 equity per household since the summer of 2020.

In its Autumn Market Report for 2022, ERC noted that while UK households have collectively taken on over £100 billion of extra mortgage debt over the last two years, rising prices have continued to increase their equity. This has assisted as the average UK property owned through mortgage debt has fallen to 22.8% – the lowest figure since before the 2007/8 banking crisis – with the remaining 77.2% owned in equity or cash.

Rising house prices have meant that, while mortgage debt has grown, it is secondary to vast reserves of housing equity which can help multiple generations to achieve financial security by giving them more options and choices in managing their money, David Burrowes, chair of the Equity Release Council, said.

The industry body for the equity release sector also found that the popularity of lifetime mortgage has increased in every UK region which, according to experts, is a significant sign that the market is in a strong position and advisers are doing a stellar job at identifying the right products for clients’ individual circumstances.

On occasions, I have seen commentary regarding equity release being London-Centric or something that only those in the South can benefit from, Will Hale, chief executive at later life adviser Key, noted. Today’s figures from the Equity Release Council clear up that misconception and highlight that housing equity is being used across the country to repay mortgages, help families, and improve retirement income.

Equity release has traditionally been more common in the South of England, backed by higher average house prices, Les Pick, director of manufacturing and adviser propositions at equity release lender more2life, added. However, the benefits of releasing equity are the same across the UK, so it is particularly positive to see popularity grow 40% in Wales and over a quarter in every region of the North and Midlands.

Pick said that while people are now more cautious about financial decisions, the support of a specialist financial adviser would ensure they are best placed to find the right option for their current, as well as future, circumstances.

Stephen Lowe, group communications director at retirement specialist Just Group, agreed that professional advice is crucial to making sure that equity release is the most suitable solution and offers the options required.

Members of the Equity Release Council are committed to the highest levels of consumer protection and to creating plans that continue to provide good outcomes in a changing economic environment, Lowe stressed.

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