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Nearly £2 trillion of equity is sitting in properties around the UK, according to the latest figures.

GE Money Home Lending has revealed that, with the help of house price inflation, the UK housing market has generated £1.96 trillion of property equity.

This means on average, each homeowner has approximately £127,455 sitting unused in their property.

The study showed that a quarter of UK homes are owned outright by their owners, giving them £1.377 trillion of property wealth. Meanwhile, over a third of Britons have mortgages, but still have £582 billion of equity in their homes.

Gerry Bell, head of mortgage marketing at GE Money Home Lending, says UK homeowners should count their blessings for such a windfall. He says: “Whatever happens to the property market in the short term, we have had a prolonged period of rising prices which have – importantly – helped many homeowners to build equity and a reassuring cushion against any downturn.  

“However, whilst consumers should take some reassurance from the equity that they currently hold in their homes, they also need to ensure that they are not complacent and continue to make prudent financial decisions – particularly in an environment of economic slowdown which could potentially see house prices falling.”

If the statistics are looked at from a regional basis the picture is extremely varied: the South East can account for most of UK property wealth with £377 billion in equity. This is followed by London with £276 billion, making them the two wealthiest regions when it comes to property equity.  

The North East has only 2.97% of the property wealth whilst Wales has 4.5% – the two lowest percentages in the country.

When it comes to outright ownership versus those that have a mortgage again there is again much regional variation, with areas of higher equity falling down the tables. For instance, the North West and Wales have a third of people that own their own homes outright, compared to London with only 20% – a half more Welsh homeowners actually own their own home outright compared to Londoners.

Bell added: “It is true that many homeowners have benefited from significant growth in house prices recent years but clearly the picture is complex.

“What this research highlights are interesting regional variations. Whilst the majority of property equity is found in London and South East, almost a third of homeowners actually own their own homes outright in areas with significantly less equity – such as Wales and the North West. So while these consumers are not as equity-rich they are less impacted by rates rises and house price uncertainty.”

This good news comes as BM Solutions has revealed, on average, Brits have £814 in savings. Jason Robinson, director of savings operations at BM Solutions, says: “While the economic climate has led to a tightening of budgets amongst households throughout Britain, we are delighted to see that people are getting into the savings habit and are maintaining the amount they set aside each month.

“While many people in Britain may be finding life a little tougher this January compared to last, it is even more important to make sure your money works hard for you.”

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