Over-65s Hold £2.25 Trillion in Housing Equity: What It Means for Family Finance

Homeowners aged over 65 held £2.25 trillion of equity in their main homes in 2025, accounting for 43% of UK owner-occupier housing equity, according to Savills analysis examined by the Financial Times today.

The scale of that wealth brings a familiar family problem into sharper focus. Parents may own a valuable home outright while their adult children struggle to assemble a deposit or meet mortgage affordability requirements. Yet the parents’ largest asset is also their home, and may need to support decades of retirement.

The Financial Times report, published on 14 November, provides a fresh examination of an established concentration of housing wealth. The £2.25 trillion relates to the stock of main-home equity in 2025. It is neither new wealth created this week nor money immediately available for families to withdraw.

The equity may be substantial, but the cash can be limited

Housing equity is the value of the property after mortgage debt, rather than a savings balance. Accessing it generally involves a sale or an agreed borrowing arrangement. Neither the property valuation nor the absence of an existing mortgage establishes what a homeowner can safely give away.

Consider an illustrative family whose parents own a mortgage-free £1.5 million home and want to help a child with a £150,000 deposit. The proposed gift is 10% of the property’s value, but that calculation says nothing about mortgage eligibility, the cost of raising the money or the parents’ future ability to meet payments.

The useful starting point is the parents’ position after helping: their dependable income, accessible savings, existing commitments and provision for repairs, adaptations or future care. A lower gift, staged assistance or a different purchase budget may fit that position better than maximising borrowing against the home.

Having spare bedrooms does not mean a household wants to move

The English Housing Survey’s age-cohort report puts under-occupation among households headed by someone aged 65 or over at 58%, equivalent to 4.3 million households in 2024–25. Its definition means at least two bedrooms above the number required by the bedroom standard. These are England figures, not a UK-wide count.

They do not identify homes being offered for sale or households willing to downsize. Space can serve family visits, caring arrangements or other needs. A move may also disrupt established relationships and access to local services.

For families who want to remain in their current home, the question becomes whether support can be provided through existing cash, income-backed assistance or suitable borrowing, while preserving a workable retirement budget.

A deposit shortfall and an income shortfall need different responses

A larger deposit can reduce the mortgage a child needs, but the remaining loan must still be affordable. If the main constraint is income, a cash gift may not resolve the whole problem. Conversely, adding a supporting borrower does not automatically supply the deposit or purchase costs.

Which?’s guide to parental help distinguishes gifts from loans. A genuine gifted deposit is not expected to be repaid; a family loan creates an obligation that the mortgage lender needs to understand. The arrangement and source of funds should be disclosed accurately rather than describing repayable money as a gift.

The family should also agree what happens if the property is sold, a relationship ends or support is needed elsewhere. Those decisions belong with the legal documentation and the lender’s requirements, not an informal understanding left until after completion.

Supporting the mortgage can avoid an immediate capital gift

A joint borrower sole proprietor arrangement can allow an eligible family member’s income to support borrowing without that person becoming an owner. The supporting person is a borrower with repayment obligations, not simply someone lending their name to the application.

Accord’s published JBSP information illustrates that the supporting borrower’s own expenditure and debts are assessed. Its criteria require independent legal advice for the non-owner borrower. Eligibility, age limits and accepted income differ between lenders.

Families should establish how the commitment affects the supporter’s retirement plans and future borrowing. There also needs to be a credible route for ending the support. A later release from the mortgage normally depends on lender consent and the remaining borrower meeting the relevant requirements; an expected salary increase is not a guarantee.

Borrowing against the parents’ home creates a separate obligation

Where the parents need to raise cash, a conventional mortgage or additional borrowing may be worth examining alongside other options. The assessment must consider age, income into retirement, repayment term, property and purpose. A large equity cushion does not replace those checks.

If the money is then gifted, the parents retain the mortgage liability even though the cash has left their control. The child’s ability or willingness to help later should not quietly become the parents’ repayment plan.

Any comparison should show payments, fees, early repayment terms and what changes if one partner dies or income falls. The relevant test is whether the supporting household can maintain its own security after the transaction, including when circumstances are less favourable than expected.

Retirement interest-only and lifetime mortgages work differently

MoneyHelper’s retirement interest-only guidance explains that a RIO borrower makes monthly interest payments, with capital usually repaid when the home is sold, the borrower dies or moves into long-term care. The lender must be satisfied that the interest payments are affordable.

A lifetime mortgage is a different form of later-life borrowing. MoneyHelper’s lifetime mortgage guide explains that interest may be added to the loan, depending on the arrangement, causing the balance to grow through compounding. Some plans allow payments to manage that growth. Costs, future moving plans and the effect on the estate require careful comparison.

Releasing capital can also affect means-tested support. Equity-release recommendations need specialist advice from an appropriately qualified adviser with the necessary permissions, alongside independent legal advice. They should not be treated as the default consequence of owning a valuable home.

Downsizing can release capital, but timing and costs matter

For owners who want to move, the usable proceeds are the difference between the sale and purchase prices after debt, taxes, fees, moving expenses and any work on the next home. The headline price gap can overstate what remains available for family assistance.

Buying before selling creates a separate timing problem. As MoneySavingExpert’s bridging guide explains, short-term secured borrowing can cover such a gap, but brings costs and risk. A realistic sale timetable, conservative proceeds and a plan for delays are essential; an extension or later refinance cannot be assumed.

The family plan needs to protect the person providing the help

Property support can change the balance between siblings, the funds available to a surviving partner and the homeowner’s options if care becomes necessary. Gifts, family loans and shared borrowing therefore need to be considered alongside wills, ownership and professional tax advice. None should be presented as an automatic inheritance-tax saving.

A family review should begin with the amount needed and the problem it solves, then compare the practical consequences for each household. It should distinguish money being given away from income being committed and property being offered as security.

Willow can assess relevant residential mortgage options and coordinate the finance with the family’s legal, tax and wealth advisers. Where specialist later-life advice is required, that must sit with an appropriately qualified and authorised adviser. The national wealth figure is striking; the appropriate amount of support remains an individual family decision.