Housing

Quarter of Brits own home outright

9 February 2008

The 26 per cent who owned their properties outright contributed to a total of £1.377 trillion of property worth, while those with a mortgage accumulated £582 billion of equity in their homes, the study showed.

Regionally, London and the South East accounted for 19.2 per cent and 14.1 per cent respectively of property equity, while at the other end of the scale property equity in the North East was less than 3 per cent.

Commenting on the findings, Gerry Bell, head of mortgage marketing at GEMHL suggested that prolonged period of property price growth had accounted for a strong market.

He said: “Many home owners have benefited from significant growth in house prices in recent years but clearly the picture is complex.”

He added: “While the majority of property equity is found in London and the South East, almost a third of home owners actually own their own homes outright in areas with significantly less equity – such as Wales and the North East. So while these consumers are not as equity rich, they are less impacted by rates rises and house price uncertainty.”

Hugh Nichols, proprietor at Badbury Berkeley Financial Services, expressed his surprise at the results.

He said: “The ratio seems quite high and I would expect that these figures are historical. The number will almost certainly decrease as people look to equity release.”