Older homeowners need more frequent valuations

Older homeowners need more frequent valuations

More valuations of homes across the UK need to be carried out for older people, after research showed that many older homeowners across the nation are struggling when it comes to knowing what their own home is worth. 

It means that many people over the age of 55 have a far greater property wealth than they believe they do, with the average older person believing their home to be worth around £90,000 less than it really is, according to the research from the Equity Release Council. This is a problem when people could be using the value of their home to plan their later life and retirement, if they knew what they were worth. 

According to the study, the average person over the age of 55 bought their home at a price of £100,756. With the average time most spent in their home amounting to 17 years and one month, it is now estimated that their house will be worth around £257,000, but this is almost £100,000 below their actual market value. 

Older people's estimates put their house price appreciation at 156 per cent. However, the Office for National Statistics (ONS) figures released this year suggest that in the same time, the average house price has actually increased by 244 per cent, showing just how much older people are underestimating values. 

The main problem at the moment is a lack of valuations among older people, with almost two-thirds of older homeowners (60 per cent) now saying that their home has not actually been valued since they bought it almost two decades ago on average. 

"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," said Nigel Waterson, chairman of the Equity Release Council. 

"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. They also show a large number of people are looking for help to decide how using their savings, equity release or downsizing can work best to meet their individual needs," he added.