MortgagesDec 14 2015

Homeowners underestimate house value: ERC

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Homeowners underestimate house value: ERC

Most homeowners aged 55 and above have underestimated their house value by an average of £90,000, according to research by the Equity Release Council.

Three in five older homeowners have not had their houses valued since first buying them almost 18 years ago, the research found, suggesting they have more property wealth than expected.

Nigel Waterson, chairman of the Equity Release Council, said: “It is no secret that the property market has been kind to many homeowners, but it is remarkable to see how far people underestimate the potential size of their housing wealth, which puts the average pension pot in the shade.

“At a time when savings are scarce and retirees face an uncertain financial future with the end of generous final salary pensions, these findings prove just how important it is that property wealth plays a role in financial planning for later life.”

The research showed the average UK homeowner aged 55 or more originally paid £100,756 for their home.

Having lived there for an average of 17 years and 10 months, they now estimate it is worth £257,584, whereas it is really worth an average of £346,861.

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Simon Chalk, equity release expert at Age Partnership, said: “We are reaching a tipping point, with more over-55s starting to look to their housing wealth to supplement their pension savings and fund a better quality of life in retirement.”