Recovering house prices in the first half of 2024 have driven the total value of the UK’s property equity to £5.7trn, analysis by the Equity Release Council has indicated.

The figure surpasses the previous high of £5.6tn from mid-2022, when the housing market was buoyed by pent-up demand after the pandemic.

Total UK mortgage debt of £1.6tn compares with an overall property market value of £7.3tn, while the Council’s data also revealed that this gives an average loan-to-value (LTV) of just 22.2%, with the remaining 77.8% of the housing market effectively owned in equity or cash.

The average LTV has dropped from 28.9% in 10 years, and means for every £10,000 of property owned, £7,720 is backed by cash with mortgages covering only a minor share.

“While we haven’t seen double digit growth in house prices this year, we have seen the property market start to recover which has pushed the total value of unmortgaged residential property in the UK to over £5.7trn,” commented CEO of the Equity Release Council, Jim Boyd.

“Much of this is in the hands of the older generation and our findings make it crystal clear that your prospects of living comfortably in retirement will rest on firmer foundations if you own your own home and include property wealth in your financial plans.

“Spare funds aren’t easy to come by in the current climate, either for households or for Government so it’s vital that we help older homeowners consider the role that the £3.4trn worth of property wealth can play in later life finances.”

While the most property-rich regions are concentrated in the south of England, every region of the UK has significant reserves of housing wealth among its older population.

Nationally, the Council’s findings mean that over-55 homeowners in own property wealth worth more than 22 times the £152bn which the Government will spend on Britain’s pensioner benefits during 2024/25, according to the Office for Budget Responsibility (OBR).

“We urge the new Government to look beyond pensions to improve retirement incomes and stimulate the economy,” added Boyd. “There is a compelling need for Government to set out its vision for property wealth in later life funding.

“A thriving later life mortgage market can help to achieve both of these outcomes.”

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