Housing equity of Scots aged 55+ exceeds £209bn

The housing equity of Scots aged over 55 stands currently at £209.5 billion, according to analysis by the Equity Release Council of UK Government and Bank of England data.

The average property wealth of Scots over 55 is £214,743.

Recovering house prices in the first half of 2024 lifted the total value of the UK’s property equity to an unprecedented £5.7 trillion, according to the analysis.

The Equity Release Council said total UK mortgage debt of £1.6 trillion compares with an overall property market value of £7.3 trillion.

“This gives an average loan-to-value (LTV) of just 22.2%, with the remaining 77.8% of the housing market effectively owned in equity or cash,” said the council.

“The average LTV has dropped from 28.9% ten years ago, and means for every £10,000 of property owned, £7,720 is backed by cash with mortgages covering only a minor share …

“Government data shows more than half (55%) of homeowners in England are aged 55+ and 76% of over-55s own their own home. The council’s analysis indicates the average over-55 owner-occupied household in the UK has £321,213 of equity in their home.

“While the most property-rich regions are concentrated in the south of England, every region and constituent country of the UK is home to significant reserves of housing wealth among its older population, which add up to more than £3.4tn in total.

“Nationally, the findings mean over-55 homeowners in Great Britain own property wealth worth more than 22x the £152bn which the Government will spend on Britain’s pensioner benefits during 2024/25, according to the Office for Budget Responsibility (OBR).

“For households, the £321,213 of equity in the average UK over-55 homeowner’s property is worth almost 10x the average pensioner couple’s annual net income of £38,168.”

Equity Release Council CEO Jim Boyd 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.”

The council’s analysis uses data from the Bank of England, Office for National Statistics (ONS) and Government departments including Work and Pensions and Housing, Communities and Local Government.

The total value of UK housing and property equity are based on the latest market values reported by the UK House Price Index. Regional and age-specific estimates are based on UK House Price Index, English Housing Survey and Wealth and Assets Survey data.

The Equity Release Council is the representative trade body for the UK equity release industry with more than 750 member firms.