The value of the equity UK homeowners have in their properties has risen to a record £5.7trn, due to recovering house prices in the first half of this year.

This figure tops the previous high of £5.6tn from the middle of 2022, when the housing market was buoyed by pent-up demand after the pandemic, according to the Equity Release Council.

The total UK mortgage debt of £1.6tn compares with an overall property market value of £7.3tn.

This gives an average loan-to-value of just 22.2%, with the remaining 77.8% of the housing market effectively owned in equity or cash, according to the later life lending trade body.

The average LTV has dropped from 28.9% ten years ago, and means for every £10,000 of property owned, £7,720 is backed by cash with mortgages covering only a minor share.

More than half, or 55%, of homeowners in England are aged 55-plus and 76% of over-55s own their own home, according to official figures.

The average over-55 owner-occupied household in the UK has £321,213 of equity in their home, adds the trade body.

Legal & General managing director, retail retirement, Lorna Shah says: “For many homeowners aged over 50, the value of their property is still proving to be one of their most significant assets, so it is no surprise that a growing number of homeowners are considering the role it might play in their later-life financial planning.

“The recovery of house price values makes this even more appealing, particularly as homeowners consider how their property wealth could be used to achieve longer-term goals.”

Equity Release Group founder and chief executive Mark Gregory adds: “With nervousness about the upcoming Budget, and the implications it may have on those planning their retirement, many people are looking for alternative ways to help fund their retirement plans.

“The figures shared by the Equity Release Council can provide some reassurance to homeowners, some of which may be impacted by the changes being proposed to pension tax, the winter fuel allowance and inheritance tax.”

Equity Release Council chief executive Jim Boyd points out: “While we haven’t seen double-digit growth in house prices this year, we have seen the property market start to recover which has pushed the total value of unmortgaged residential property in the UK to over £5.7trn.

“Much of this is in the hands of the older generation and our findings make it crystal clear that your prospects of living comfortably in retirement will rest on firmer foundations if you own your own home and include property wealth in your financial plans.”