Property owners over the age of 55 could have a lot of extra cash for home improvements in the future after it was revealed the average amount of equity for this age group is nearly £290,000.
According to the latest findings from SunLife, those nearing retirement age typically have houses worth £290,659. However, they generally bought their homes 20 years ago, when they were worth an average of £51,633.
This huge £239,659 increase in value, together with the fact that those who have not paid their full mortgage only owe £55,044, means over 55s could have access to a considerable pot of money.
Indeed, 82 per cent have paid their home off in full, which means they have the total £290,659 in equity. Therefore, the average property asset for this age group is worth £282,623, taking into account those who still have a small mortgage to pay.
Equity release service director at SunLife Simon Stanney said: “This is a generation that are generally property rich and cash poor due [a] healthy increase in the value of their homes, but inflation [is] eating away at pension pots and increased living costs.”
Therefore, homeowners who did have plans to make improvements to their property, such as by installing new sash windows in their Gloucestershire house, may now be able to do so without raiding their savings accounts.
Indeed, they could opt for a lifetime mortgage, which involves securing a loan against the property. This is available to those who have paid their mortgage in full, and they then pay off the lifetime loan with interest when the plan comes to an end. This is typically when the homeowner dies or moves into care.