Cooling housing market conditions see equity release payouts reduce by £12k since last year. We learn more…

Over-50s property specialist, Regency Living, has revealed that people who are taking equity release from their properties are, on average, £12,400 worse off today than they were last year as the recent indications of house price recovery are yet to have a positive impact at the higher end of the property market.

Regency Living has analysed how the average price of homes that are being used for equity release has changed over the past 12 months, and how this relates to price changes in the wider UK housing market over the same period of time.

The data reveals that, while the average house price in the UK has remained fairly static over the past year, the value of more expensive properties – which are commonly used for equity release among older home owners – has actually seen a significant decrease.

Over the past year, the average UK house price has increased by 0.2 per cent, rising from £280,604 to £281,224.

Meanwhile, the average price of homes that have been used for equity release has decreased by 3.3 per cent, dropping from £376,949 to £364,586. This is an average cash drop of £12,363.

This means that older homeowners who are looking to release equity in their home in order to free up cash for other areas of their life are essentially going to be almost £12,400 worse off this year than they would have been last year.

A Regency Living spokesperson commented: “Despite the UK market showing early signs of recovery, this positivity is yet to impact the higher end of the market. This means that your typical equity release home – usually at the higher end of the price spectrum due to home owners being older and therefore more established on the market – has still seen its value decline.

“Instead of equity release, another way of freeing up some of your cash wealth is to actually downsize to a smaller, more affordable property, like a park home.”