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Potential equity release stands at £622bn

  • 30/04/2024
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Potential equity release stands at £622bn
The total amount of housing equity available to homeowners aged over 55 stands at around £622bn, a report has said.

According to Canada Life’s latest property value tracker, this is an increase from £616bn of potential equity release in Q2 2023, when the report was last done.

Drilling down into regions, the South East, London and East Anglia had the most potential equity release value available at £111.5bn, £118.4bn and £69.6bn respectively.

On the other hand, the North East, Wales and Yorkshire and the Humber had the lowest potential value available at £16bn, £24.7bn and £37.2bn apiece.

Sadna Zaman (pictured), proposition development manager at Canada Life Home Finance, said: “Equity release can be a powerful tool to unlock the wealth tied up in your home and improve your retirement lifestyle.

“Despite the various economic headwinds and general uncertainty over the past year, property prices have remained firm, and even edged up in some areas. This resilience in the property market continues to create significant housing equity, which can be released by homeowners looking to improve their retirement prospects.”

She added that the latest retirement income data released by the Financial Conduct Authority (FCA) showed the most common withdrawal rate for pensions for pot values up to £250,000 is 8%.

Zaman continued: “People may be deliberately depleting their pensions as part of well-informed financial plans, but it may well be that some will be left wondering where their pensions have evaporated to in due course.

“While I certainly wouldn’t want to see equity release seen as a purchase of last resort, the product will continue to remain a key part of later life planning.”

She said that, for older homeowners looking to free up cash from their homes, equity release could be “used to meet their evolving needs in later life, whether that be to boost income, pay for the cost of care or make home improvements”.

“Releasing equity remains a significant financial decision, but it will continue to play a vital role in retirement planning. Equity release can offer flexible ways to meet individual customer requirements,” Zaman said.

Figures from the Equity Release Council (ERC) showed lending fell by 6% quarter-on-quarter to £504m during the first three months of this year.

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