Older owners have reduced equity to draw down

Older home owners taking equity release from their properties are, on average, £12,400 worse off today than they were last year, thanks to the faltering house price recovery.

Over-50s property operator Regency Living has analysed how the average price of homes that are being used for equity release has changed over the past 12 months, and how this relates to price changes in the wider UK housing market over the same period.

While the average house price in the UK has remained fairly static over the past year, the value of more expensive properties - commonly used for equity release among older homeowners - has seen a decrease.

Over the past year, the average UK house price has increased by 0.2%, rising from £280,604 to £281,224. Meanwhile, the average price of homes that have been used for equity release has decreased by 3.3%, dropping from £376,949 to £364,586. This is an average cash drop of £12,363.

London has seen the largest price drops for equity release homes, falling by 9.9% on the year, followed by the East of England (8.3%), and the South East (4.1%).

There are, however, five regions in which homes at the higher end of the market have seen positive price change over the past year. In the East Midlands, the average price of equity release homes has grown by 5.4%, followed by Scotland (2.6%), Yorkshire & Humber (0.9%), the North East (0.7%), and the North West (0.2%).

A Regency Living spokesperson comments: “Despite the UK market showing early signs of recovery after a difficult few years for house prices, this positivity is yet to impact the higher end of the market. This means that your typical equity release home - usually at the higher end of the price spectrum due to homeowners being older and therefore more established on the market - has still seen its value decline.”