The figures, based on public data on UK property owned by over 55s and Nationwide house price figures, represent an increase of 2.6% over the past year. This compares to 1.0% growth in 2016. However, a slowdown in house prices in Q4 2017 means the total value of the equity release market has fallen by £55m (0.01%) compared with Q3 2017.
Alice Watson, Head of Product and Marketing at Retirement Advantage, said:
“The growth in house prices over the last year is further evidence of the enormous potential property value yields when it comes to planning for retirement. Concerns are growing that people are finding it difficult to save enough for the retirement they want, not helped by the sluggish wage growth we have seen over the last decade. There is an urgent need for property to become part of the retirement equation – and these figures demonstrate the impact it could have.
“Despite the dip in house values at the end of 2017, the total potential value of UK equity release is up by nearly a fifth compared with its pre-crash peak in 2007. Equity release will not be suitable for everyone, but savers who think holistically and discuss property alongside other assets with their financial advisers are best placed to live the retirement they want.”
“For many, their property is the most valuable asset they own and typically worth far more than their savings. We saw a record £3bn taken out in UK equity release last year, but even this is a drop in the ocean compared to how much could potentially be drawn on by over 55s. With such a vast store of wealth in our bricks and mortar, equity release could grow even further in the coming months and years.” our business significantly.”
