- Emma Walsh
Property wealth hits new high
The overall value of UK housing stock has risen from £5.67trn to £6.42trn over the last year, with private property wealth reaching a new high of £4.87trn according to figures released by the Equity Release Council.
While the level of mortgage debt has reached unprecedented levels, now above £1.5trn, fast rising property prices mean that for every £1 of mortgage debt, there is more than £3 of equity in our homes.
And the national lockdowns turned borrowers into a nation of savers as households repaid more than £19bn of mortgage capital during both Q1 and Q2 2021, having never repaid more than £18bn in any previous quarter
This increase in property value has fuelled an increase in equity release as homeowners take the opportunity to draw on equity to meet later life financial needs. The Equity Release Council figures suggest that more than three quarters of the value of the average home is tied up in equity rather than debt, leaving £201,642 of property wealth potentially available.
Looking specifically at the equity release market, the ERC’s figures show that across the first half of 2021, 35,860 new and returning customers unlocked £2.3bn of property wealth.
The wider availability of product options, nearly double the number available just 2 years ago, has seen customer numbers steadily rise with June 2021 seeing the most new plans agreed (3,348).
Having fallen to a low of 3.95% earlier in the year, average interest rates now sit around 4.26%.
WALSH WEST CCA - WALSH WEST LAW
LINES OPEN 7 DAYS A WEEK:
0203 488 7503 / 01992 236 110