Average home value pays for seven years’ later life care, Just Group finds

The average house price in England is enough to provide enough money to cover around seven years of care in a residential home, Just Group has found.

The firm added that with increasing costs outstripping property price rises, the number of years covered is gradually reducing, potentially undermining the plans of people planning to self-fund their care needs by selling their homes.

Although the average house price in England hahasve risen by around 12% since 2020/21 to more than £300,000 by the end of 2023, the weekly cost of care in a residential home has risen by about 20% to £816 a week in the same period.

The analysis found that care cost increases have outstripped house price rises in all English regions, particularly in London, where average home prices have risen by 3% compared to care cost rises of 17%.

Group communications director at Just Group, Stephen Lowe, said: "The home is often the most valuable asset which, under current rules, makes it a major source of finance for people funding their own care.

"Research for our annual care report found homeowners aged 45+ were more likely to see selling their home as a source of funding than any other option such as pensions, investments or the State. That makes average house value compared to care cost an interesting metric to track.

"Our analysis shows selling the average home in England could pay for about seven years of residential care but there is evidence of a North-South divide. In the North East it is four years while in London it is nearly 11 years. These are optimistic figures because in the real-world self-funders meeting all their own costs pay higher fees than those receiving some or all council funding, while the costs would be higher still if specialist nursing care were needed."

Just Group said that the house price to care cost ratio is a useful measure because currently about half of care home residents pay all their own fees and a significant amount of funding is sourced from people selling their homes when they go into a care home.

In research on homeowners aged 45 and over, the group found that property was a more common source of potential care funding than any other option. When asked how they would pay when they went into a care home in the future, the most common option was that people would sell their homes to pay for care (40%).

Lowe added: "Under the current means-tested social care system, those with assets of more than £23,250 have to pay for their own care and this will include their residence unless it is still being lived in by someone such as a spouse.

"Most people haven’t made alternative plans for paying for care. Reforms that might have helped to protect the value of the home have been delayed and may never be implemented. That means the onus remains on people to find the funds where they can, which is often the home.

"The care sector is facing huge funding pressures and, as we head towards a General Election, voters should look at what answers the politicians are suggesting. People need certainty so they can stop fearing the future and start planning for it."



Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.

Air and the role of later-life lending
Content editor at MoneyAge, Dan McGrath, spoke to the chief executive officer at Air, Will Hale, about the later-life lending industry, the importance of tailored advice and how technology and obligations have shaped the sector.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.