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."

---