The recovery of house prices in the UK and the increasing number of un-mortgaged and wholly owned properties has driven the value of equity in the UK housing stock to £5.7tn.
78% of the average property is owned in cash with over 55’s holding an average of £321,213 equity in their homes. Their collective property wealth stands at £3.4tn according to analysis undertaken by the Equity Release Council (ERC)
The ERC estimates the overall property market stock value at £7.3tn, up from the previous high of £5.6tn in mid-2022 at the height of post pandemic demand. Total UK mortgage debt sits around £1.6tn meaning an average loan-to-value (LTV) of 22.2%, with the remaining 77.8% of the housing market effectively owned in equity or cash. This is the lowest it has sat since before the 2007/08 market crisis.
The ERC’s research focused on the over-55 population finding more than half (55%) of homeowners in England are aged 55+ and 76% of over-55s own their own home. The £321,213 average equity is worth almost 10x the average pensioner couple’s annual net income of £38,168.
On a recent Today’s Wills and Probate podcast, Dave Newick of Arken explains how the legal sector must prepare for the largest intergenerational financial upheaval in history, dubbed ‘The Great Wealth Transfer.’ Baby Boomers, those born between 1946 and 1964, currently hold c.80% of the UK’s wealth. With the older baby boomer now 78 years old, and against a backdrop of an average age of death of 80.7 in the UK, we are, says Dave, about to see the largest transition of wealth from one generation to another ever… making figures like those released by the ERC critical to wealth and estate planning.
Regional property wealth among over-55 homeowner households
| Country/region | Net Property wealth per over-55 homeowner household | Total property wealth among over-55 homeowners |
| UK | £321,213 | £3,434,895,186,557 |
| Great Britain | £324,241 | £3,367,809,644,113 |
| England | £340,676 | £3,018,834,898,896 |
| South East | £426,749 | £705,679,175,313 |
| East of England | £378,686 | £419,187,808,196 |
| London | £583,618 | £411,409,806,553 |
| South West | £353,940 | £394,675,899,380 |
| North West | £245,928 | £294,603,213,216 |
| West Midlands | £282,525 | £260,620,763,299 |
| East Midlands | £273,585 | £243,455,563,854 |
| Yorkshire and The Humber | £240,245 | £214,009,005,744 |
| Scotland | £214,743 | £209,529,176,778 |
| Wales | £240,436 | £132,174,188,611 |
| North East | £183,950 | £69,835,022,579 |
| Northern Ireland | £206,417 | £63,319,934,537 |
Source: Equity Release Council analysis of Government and Bank of England data
Commenting on the research Jim Boyd, CEO of the Equity Release Council, said:
“While we haven’t seen double digit growth in house prices this year, we have seen the property market start to recover which has pushed the total value of unmortgaged residential property in the UK to over £5.7 trillion. Much of this is in the hands of the older generation and our findings make it crystal clear that your prospects of living comfortably in retirement will rest on firmer foundations if you own your own home and include property wealth in your financial plans.”
“Spare funds aren’t easy to come by in the current climate, either for households or for Government so it’s vital that we help older homeowners consider the role that the £3.4 trillion worth of property wealth can play in later life finances. Whether it is boosting income, managing unsecured debt, paying for care or helping to get family members onto the property ladder, there is a huge amount of potential tied up in bricks and mortar. Financial advisers need to ensure that when they are speaking to their clients, the role of property is discussed – even if the right approach is ultimately to look at other options. We need to encourage informed choices rather than simply relying on what works for previous generations.”
“We urge the new Government to look beyond pensions to improve retirement incomes and stimulate the economy. There is a compelling need for Government to set out its vision for property wealth in later life funding: a thriving later life mortgage market can help to achieve both of these outcomes.”
