Pru’s latest equity-release index reveals that over 40 per cent of seniors’ property equity belongs to those living in London and the South-east.
However, falling house prices in recent months have meant the amount of equity has fallen in most regions although London has seen a rise. The average homeowner aged over 65 in the South-west saw the value of equity in their home fall by £6,117 between February and May this year, 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. In London, there was an increase of an average of £954.
Director of lifetime mortgages Keith Haggart says: “Although most retired homeowners have seen the value of equity in their homes fall in recent months, it is important that they do not 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.”
Fair Investment says this equity could be used to bolster low pension provision.
Fairinvestment.co.uk chartered financial planner Sharon Bratley says: “The increased interest in equity release is hardly surprising, given the current financial climate. Pensioners are finding it tough and releasing equity from property may be the only way for some.”
Key Retirement Solutions business development director Dean Mirfin says: “The amount of equity-release potential out there is huge. The market is going to explode in the next few years as the baby boomers come up to retirement age.
“We are already seeing more pensioners than children now and that is only going to increase.”