Equity available for release in UK homes touched a record £730bn as house prices have jumped over the last year, according to Canada Life.

The financial services firm says the amount of housing equity available to homeowners aged over 55 now stands at an estimated £729.8bn in the second quarter of the year, a jump of £80bn from the previous quarter.

The data comes as house prices lifted 7.6% at an annual rate in July pushing the average house price in the UK at £261,221, according to the latest index from Halifax earlier this month.

Prices have been spurred by the stamp duty holiday prompted by the pandemic and a shortfall of houses coming to market.   

The average price of a property in the South East is now £353,000 creating £140bn of potential equity for the region, the largest available equity by region in Britain, says Canada Life.

This was closely followed by London which now has £136bn of potential equity.

Scotland and London saw the smallest growth in house prices over the quarter edging up 1.2% and 1.4%, respectively. 

But despite this, London still enjoys the highest levels of average equity available at £161,276 per household, followed by the South East, with £110,686, and East Anglia at £94,933.

Property prices in Yorkshire, the South West and the North West also grew significantly over the period, lifting by 3.9%, 3.7% and 3.4%, respectively. 

Yorkshire now has over £43bn of potential equity available, or just under £65,000 per household.

Available equity for release jumps to just under £73bn for the South West, or just over £94,000 per household.

In the North West, there is just under £63bn available, or £70,000 per household. 

Homeowners in the North East and Yorkshire had the least amount of equity available, with £53,546 and £64,830 per household, respectively. 

“This could be attributed to higher levels of homeownership in the regions,” says the report.

Canada Life head of marketing, insurance Alice Watson says: “House prices have risen dramatically over the last year which has naturally led to more equity being available across the country. 

“As a result, property wealth is increasingly being used as another element of retirement income, alongside existing savings.

“The diverse nature of equity release products mean that they can be used to meet a range of evolving needs.” 

Earlier this week, Canada Life launched a new equity release product range called Lifestyle Select Options.

It said these options allow repayment contributions of up to 10% of the initial loan amount each year, with any contributions being exempt from early repayment charges.