Rising property wealth among over 55s may provide boon for equity release
The equity release market may benefit from the growing amounts of property wealth in the hands of those in or nearing retirement, it has been suggested.
The latest wealth in Great Britain report from the Office for National Statistics (ONS) revealed that property wealth owned by Brits grew from £4.49tn between April 2014 and March 2016 to £5.09tn between April 2016 and March 2018.
The ONS said increases in property wealth were largely down to house prices continuing to rise, as well as an increasing share of homeowners who own their property outright rather than with a mortgage.
Wealth increasing with age
The figures highlight that it is the oldest cohort who are sitting on the most significant property wealth. While those aged 35-44 have mean property wealth of £139,100, this rises to £189,400 for those aged 45-54, £255,800 for those in the 55-64 age bracket, and £272,900 for those aged 65 and above.
And on a regional basis, the regions with the highest median wealth ‒ the South East, South West, London and the East of England ‒ have the highest proportional contributions from net property wealth.
In contrast, the North East has the lowest median total wealth and the lowest proportion of total wealth tied up in property.
Jim Boyd, chief executive of the Equity Release Council, noted that almost two-thirds of the property wealth held by UK households is in the hands of those over the age of 55.
He added: “This property wealth provides a potential solution to meet the challenges of our rapidly ageing population whether it is to supplement inadequate savings for ever longer lives in retirement, supporting younger generations or even meeting the costs of care.
“While drawing on property wealth is not suitable in every circumstance, it should now be on all homeowners’ checklists as they consider how to meet these needs in later life.”
Rise in property debt
Alongside the wealth report, the ONS also published data on the nation’s debt levels. It found property debts have grown from £1.131bn to £1.164bn over the same period.
Median household property debt ‒ for those with mortgages or equity release ‒ has risen five per cent to £96,000.