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Halifax House Price Index: 1 in 30 high net worths are relying on their homes to fund 100% of their retirement

by | Oct 6, 2023

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In light of the latest House Price Index figures released by Halifax today which revealed that house prices have fallen by X%. 

The latest Saltus Wealth Index surveyed 2,005 people with investable assets of £250,000+ and found that 1 in 30 high net worths are relying on their homes to fund 100% of their retirement.

Megan Jenkins, Partner at Saltus below has commented on the data, the comment can be seen below:

 
 

Today’s 4.7% fall in house prices and the overall slowdown in the housing market seen over the last six months raise significant concerns about the retirement plans of many high net worth individuals.

“The Saltus Wealth Index Report, a comprehensive study of 2000 individuals with investable assets of £250,000 or more, revealed that 1 in 30 respondents were pinning their hopes on their home’s value to fund 100% of their retirement. On average, respondents expected their property to contribute 44% of their retirement funds.

These findings are alarming as relying solely on property for retirement planning is not a recommended strategy. The cost of purchasing a new home may eat into funds intended for retirement and the unpredictability of the market may result in the need to sell at a lower price than anticipated due to short-term market conditions out of their control. There is also a significant emotional aspect to consider, with an understandable attachment people often have to their homes making it difficult to downsize when necessary.

 

The recent decline in house prices and challenging market conditions underscore the importance of diversified retirement planning, particularly for HNWIs. Relying solely on property to fund retirement carries significant risk and it is crucial for individuals to have a well thought out and diversified plan that takes into account both the financial and emotional aspects.

If you are in any doubt about your retirement plans, you should speak to a financial adviser to work on a solution that is bespoke to you and your needs.”

On the Halifax House Price Index figures, Sam Mitchell, CEO of Purplebricks has also commented:

 
 

There is a large lag indicator to the Halifax data and what we at Purplebricks are seeing on the ground is sentiment turning towards the housing market. It has changed quite dramatically over recent weeks, driven by news inflation was lower than expected and the Bank of England’s somewhat unexpected decision to hold interest rates. Normally we would be seeing the start of a seasonal slow down at this point but instead we have seen a spike in both properties coming to market and buyers viewing and making offers. We can see that mortgage rates coming down is really helping consumer confidence in restarting house searches that have previously been paused and expect this momentum to continue through October. For tenants, this drop in rates is welcome news when rents have been at extortionate levels for some time now. For first time buyers, this is the first moment in many months when the dream of becoming a homeowner can become a reality.”

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