According to Just Group, who analysed statistics obtained by request from the Office for National Statistics, the growth is equivalent to around £1bn a day.
In March 2020, over-55s owned more than £3.5trn of housing equity, making up just around 65 per cent of the UK’s total housing wealth and nearly half (47 per cent) sits with those aged between 55 and 74.
The report noted that the average property price during the pandemic has grown by nearly a quarter, which was attributed to pent-up demand from the first pandemic, race for space and stamp duty holiday.
Stephen Lowe, group communications director at Just Group, said: “Evidently, many homeowners will have benefitted from the property price rises that have driven the market to record highs since the start of the pandemic.
“Given over-55s hold the majority of net housing wealth in the UK, it is unsurprising that they will have reaped the biggest rewards from the growth in the market. But as we enter a new economic cycle, this vast storage tank of wealth they have accumulated will inevitably play an important role in their future finances.”
Property wealth to provide for “living inheritances”
He said that as inheritance tax thresholds were frozen until 2026 and rising house prices would likely tip more estates into paying inheritance tax.
Lowe added that using property wealth to make “living inheritances” could provide homeowners with a means of mitigating the impact of inheritance tax and provided loved ones with support.
He continued that the assistance could be aimed at getting younger generations onto the housing ladder or shield them from “immediate financial pressures”.
“For those homeowners who find themselves asset-rich but income-poor, equity release may be a way to provide additional income or clear debt, giving them the resources they need to help them or their children face the cost of living crisis that looks set to bite more deeply this winter,” Lowe noted.
With the latter point in mind, Mortgage Solutions recently reported that brokers expect ‘an explosion’ in equity release the coming months, as the cost of living crisis starts to bite even harder.
