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The latest findings from Prudential reveal that despite falling house prices, homeowners aged 65 and over still have £726.43bn of equity in their homes.
Its equity release index, which tracks the amount of equity held in the properties of people aged 65 and over in England and Wales, found that over 40% of equity belongs to those living in London and the South East.
The findings reveal that the value of property equity belonging to homeowners aged 65 and over fell by £7.7bn between February 2008 and May 2008.
However, this decline in value is very recent because between June 2007 and May 2008, the figure increased by £12.731bn.
Between February 2008 and May 2008, London is the only region in England and Wales that actually saw an increase in property equity values. The average homeowner aged over 65 in the South West saw the value of equity they have in their home fall by £6,117, the highest decline for any part of the UK. This was followed by £2,964 in the North East and £2,645 in the South East. Homeowners in London saw the equity in their homes increase by an average of £954.
Keith Haggart, director of lifetime mortgages at Prudential, said: “Although most retired homeowners have seen the value of equity in their homes fall in recent months, it’s important that they don’t lose sight of the bigger picture which is that despite current falling property prices, in the vast majority of cases retired homeowners have built up a significant amount of equity in their homes over a number of years.
“This, together with the rising cost of living means that many more people are now looking to release equity from their homes to maintain or improve their standard of living in retirement. Equity release schemes can be an excellent way to help do this, and any provider who is registered with trade body Safe Home Income Plans provides a no-negative equity guarantee as well as guaranteeing that the mortgage interest rate is fixed for the term of the loan.”
The January/February 2012 issue of Your Mortgage is on sale now. In it we feature expert predictions on what will happen to house prices, interest rates and the wider economy in 2012. We also explain the latest State help for first-time buyers, weigh up the relative merits of offset mortgages, and offer handy hints and tips on making sure you have the right home insurance in place. Plus we have all the regular features and our invaluable mortgage basics section. Get your copy now for the latest news, information and help
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