Property owners aged 55 and over are underestimating the value of their homes by almost £90,000, according to a new study by the Equity Release Council.
The findings have revealed that:
• Three in five (60%) have not had their home valued since first buying it, almost 18 years ago
• Estimated price increase of 156% compares to 244% reported by official figures
• Homeowners in all but one UK region – the East Midlands – underestimate house price growth over the last ten years
According to the research, the average UK homeowner aged 55 and over paid just £100,756 for their existing home. Having lived there for an average of 17 years and 10 months, they now estimate it is worth £257,584 – a price increase of 156%.
The truth is, however, that the average house price has increased by 244% over the same time. Having originally been bought for £100,756 at the start of this period, the average property among over-55 homeowners could now have a value of £346,861 today. That is £89,277 more than they estimated.
The study also discovered that four in five (80%) would consider using their housing wealth to boost their finances in later life. Options include downsizing to a smaller property or moving to a less expensive area, or unlocking some of the cash from their home’s value with an equity release plan.
Geoff Charles, CEO of Bower said: “It is clear that today’s older homeowners are vastly underestimating how much property wealth they are sitting on.”
“With so many people of retirement age struggling to get by on their current income, the money from their homes’ bigger value could be unlocked to fund a more comfortable retirement. It is great news for thousands of homeowners seeking to boost their financial situation.”
Anyone looking to release equity from their home should speak to an independent specialist in retirement lending. Call free on [tel] and take advantage of a FREE, no-obligation home appointment.
This is a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration. Bower Limited is Authorised and Regulated by the Financial Conduct Authority. Financial Services Register Number: 451607.