Homeowners sitting on ‘hidden equity’
Many of us like to think we have a rough idea of how much our home is worth, should we ever come to sell it. However, a recent survey9 suggests that just three in ten people are accurate. Almost half (45%) of UK homeowners are undervaluing their home by an average of £46,305, with nearly one in ten finding it was worth over £100,000 more than they’d thought.
Meanwhile, a quarter of homeowners thought their home was worth an additional £44,313 on average. When all the responses were considered together, homeowners are undervaluing their homes by an average of £9,470 – or £237bn collectively. For London respondents, this figure increases to an undervaluation of £22,846.
The benefits of hidden equity Among those who had gone on to sell their homes following the survey, sitting on more equity than they’d thought allowed many homeowners to improve their lifestyles::
– 50% moved to a better property
– 18% of older respondents retired earlier
– 14% were able to treat their families more
Indeed, some of them described it as feeling like they had won the lottery! So, it’s well ‘worth’ understanding your property’s true worth, particularly if you want to release equity from it.
9 Zoopla, 2021