House Price Inflation Benefits Equity Release Customers
For the first time in almost two years, UK house price inflation has reached double figures, which could encourage homeowners to release equity from the value of their property.
According to the Nationwide, the average price of a UK house increased by 1% when compared with March’s figures but inflation had grown 10.5% in the year to the end of April.
This means that homeowners either approaching retirement or already retired could release more equity from the increased values of their homes.
“House prices 10.5% higher than a year earlier”
Releasing equity has the potential to unlock a tax-free lump sum for homeowners to use on whatever means they wish. With continued growth in the average price of a UK house over the past year, releasing equity has become more valuable. Martin Gahbauer, Chief Economist for the Nationwide commented on the increased inflation:
“The price of a typical UK property rose by a seasonally adjusted 1.0% month-on-month (m/m) in April, leaving house prices 10.5% higher than a year earlier. April’s figures show the first double-digit annual growth in UK house prices since June 2007.”
House Prices Are Now 10% Below October 2007’s Peak
The average price of a UK house now stands at £167,802 which is up on March 2010’s valuation of £164,519. However, Mr. Gahbauer did warn than sustaining this double figure growth in inflation might be difficult throughout the rest of the year.
“The year-on-year rate in this month’s figures, however, received an additional boost from the fact that April 2009 was one of the weaker months last year. Given the very strong performance of house prices from May 2009 onwards, it will take monthly increases in excess of 1% for the annual rate of inflation to be maintained in double digits going forward. April’s figures leave UK house prices exactly 10% below the October 2007 peak.”
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