Market analysis has revealed that UK homeowners have already released equity to the tune of £1.4bn so far in 2022, with this figure estimated to hit almost £5.6bn by the end of the year.

The figures show that during the first three months of this year, over 12,500 homeowners opted to utilise the pent up value accumulated within their property via later life mortgages – a 21.4% annual increase when compared to the first quarter of 2021.

Leading mortgage broker, Henry Dannell, estimates that this figure could hit over 50,000 by the end of the year, a 19.6% uplift on the 41,990 homes to release equity in 2021.

Talk Property – MPU

With the total value of equity released in 2021 topping £4.4bn, and already reaching £1.4bn in 2022, Henry Dannell estimates that almost £5.6bn could be released in residential real estate equity by the end of this year.

This increased market activity is being partly driven by high-net-worth individuals and those at the higher end of the property ladder.

In fact, three of the nation’s most expensive property areas rank top for later life mortgage activity and value being released.

The South East (9%) and the South West (6%) account for the largest proportion of total later life mortgage plans so far this year and, along with London, they also account for the highest value of equity released in 2022 – totalling £810.5m across these three regions alone.

This high-end market trend is also apparent when looking at the average value of properties utilising later life mortgages.

So far in 2022, the average equity release house price sits at £373,493. This is already 2% higher when compared to the first quarter of last year and 14% higher than the average equity release property value seen in Q1 of 2020.

What’s more, the current value of a property utilising equity release through later life mortgages comes in 34% above the wider UK market average.

Director of Henry Dannell, Geoff Garrett, commented:

“Later life mortgages have continued to grow in popularity amongst the nation’s homeowners, many of whom are now making the most of the considerable increase in value that their property has yielded over the last two years.

For some, it’s become a safety net to overcome the rising cost of living, but we’re also seeing this increased activity being driven by those at the top end of the market, who may not be facing the same financial struggles as the average homeowner.

This is down to a number of factors – greater product choice and flexibility means that later life mortgages are no longer the rigid, complex instrument that they were and a competitive lending market has also helped to drive down the cost of drawing equity from a property.

For the vast majority, it’s a tax efficient way to redistribute their wealth to future generations, allowing children or grandchildren to get that first foot on the ladder, or perhaps to climb a rung or two further up it.

Not only does this form of estate planning help minimise their potential inheritance tax bill, it also allows them and their family to enjoy this redistribution of wealth here and now, rather than waiting until they’ve passed on.

In the same vein, equity released from later life mortgages can also enhance their golden years by supplementing their income or pension pot, providing them with the disposable income to enjoy their lifestyle choices.”

Table shows the number and value of equity release plans in the UK during Q1, 2022 and the annual change versus Q1, 2021
Period Number of plans Annual Increase Value of plans Annual Increase
UK Q1 2022 12551 21.4% £1,399,519,804 30.5%
UK Q1 2021 10341 £1,072,427,497
Table shows the total number and value of equity release plans by UK region in Q1, 2022
Location Number of plans – Q1 2022 Total value of plans – Q1 2022
South East 2,872 £391,448,548
London 1,006 £234,476,314
South West 1,480 £184,579,070
West Midlands region 1,047 £100,076,777
North West 1,211 £96,372,283
East Midlands 1,105 £86,516,963
East of England 754 £76,771,544
Yorkshire and the Humber 1,000 £71,635,814
Scotland 819 £64,314,264
Wales 713 £59,722,694
North East 439 £26,138,834
Northern Ireland 105 £7,466,699
United Kingdom – total 12,551 £1,399,519,804
Table shows estimated total annual number and value of equity release plans for 2022 and the annual change versus 2021
Location Number of plans – 2021 Estimated number of plans – 2022 Annual Change (%) Total value of plans – 2021 Estimate total value of plans2022 Annual Change (%)
East Midlands 3,652 4,420 21.0% £281,845,210 £346,067,852 22.8%
East of England 2,481 3,016 21.6% £216,072,444 £307,086,176 42.1%
London 4,243 4,024 -5.2% £942,199,702 £937,905,256 -0.5%
North East 1,443 1,756 21.7% £94,949,250 £104,555,336 10.1%
North West 4,227 4,844 14.6% £315,736,632 £385,489,132 22.1%
Northern Ireland 9,652 420 -95.6% £1,228,678,237 £29,866,796 -97.6%
Scotland 4,919 3,276 -33.4% £516,298,759 £257,257,056 -50.2%
South East 3,493 11,488 228.9% £277,468,833 £1,565,794,192 464.3%
South West 3,003 5,920 97.1% £193,325,491 £738,316,280 281.9%
Wales 2,231 2,852 27.8% £161,733,607 £238,890,776 47.7%
West Midlands region 2,305 4,188 81.7% £151,979,812 £400,307,108 163.4%
Yorkshire and the Humber 341 4,000 1073.0% £19,993,172 £286,543,256 1333.2%
United Kingdom – total 41,990 50,204 19.6% £4,400,281,149 £5,598,079,216 27.2%
Table shows the average value of a property utilising equity release and how it compares to the wider average house price
Location Average property value Equity Release – Q1 2022 Wider average house price Difference (£) Difference (£)
London £788,333 £523,666 £264,667 50.5%
Scotland £248,728 £181,415 £67,313 37.1%
Wales £274,720 £206,395 £68,325 33.1%
North West £268,328 £205,121 £63,207 30.8%
Northern Ireland £214,164 £164,590 £49,574 30.1%
West Midlands region £310,029 £240,528 £69,501 28.9%
South West £401,338 £313,834 £87,504 27.9%
North East £193,243 £154,913 £38,330 24.7%
South East £469,076 £384,966 £84,110 21.8%
Yorkshire and the Humber £237,163 £199,607 £37,556 18.8%
East Midlands £267,714 £240,329 £27,385 11.4%
East of England £350,310 £343,900 £6,410 1.9%
United Kingdom £373,493 £278,436 £95,057 34.1%

Equity release data sourced from Key Advice
House price data sourced from Gov.uk – UK House Price Index

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