Over £1.5bn has been released from UK property as homeowners have turned to equity release in the face of the cost of living crisis.

According to analysis from Octane Capital, the total value of equity released is up 73% annually, driven by both an increase in volume and the sums being released per plan. 

Octane Capital suggested that with the health of the UK property market looking uncertain over the short-term, UK homeowners are turning to equity release to combat the cost of living crisis, as well as improve their existing homes, rather than making the move to a larger property. 

The latest quarterly data shows that the number of homeowners opting to release equity from their home is up 25% compared to this time last year. The largest increase has been across Northern Ireland, with a 149% annual increase in equity release activity, followed by the North East (60%) and Yorkshire and the Humber (52%). 

However, it’s not just the number of homeowners opting to release equity that is on the up, the amount they’re releasing has also climbed. Octane Capital’s data revealed the average amount released across the UK during the last quarter sat at an average of £114,356, a 38% increase compared to the previous year. 

Furthermore, this trend has been driven by the London market, where the average level of equity released has climbed by 59% year-on-year, averaging £261,880.

Both an increase in equity release plans and the propensity to release a higher level of equity has pushed the total level of equity released to £1.53bn in the last quarter alone, Octane Capital’s figures show, a 73% annual increase compared to the same quarter last year. 

“Homeowners are facing a prolonged period of financial uncertainty, with the cost of living crisis stretching their household finances extremely thin,” commented Octane Capital CEO, Jonathan Samuels. “At the same time, a drop in property market confidence along with the increasing cost of borrowing has caused many to think twice before continuing to climb the property ladder. 

“However, following the pandemic property market boom, many homeowners have enjoyed a substantial boost where the value of their home is concerned and so while they may be short on cash, they’ve seen the value of their bricks and mortar nest egg increase. 

“As a result, there’s been a sharp increase not only in the number of homeowners opting to release the equity built up in their home, but also the level of equity they are choosing to release. 

“Cashing in their chips is allowing them to improve their existing home in order to meet their needs, as well as providing them with a lump sum to help stabilise their finances during the current economic downturn.”

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