The potential value of equity available to homeowners fell to £616bn in the first quarter of the year, from £624bn in the last quarter of 2022, research shows.

The highest value of equity was in the South East at £119bn and houses in that region cost an average of £388,000, according to the figures from Canada Life.

It comes as news shows there has been a rise in borrowers turning to equity release to fund healthcare and that home improvements are the most popular reason for releasing additional funds from a lifetime mortgage.

Londoners have the highest home equity

Those in London had an average of £145,000 in equity during the first quarter of this year, with houses in the capital at an average of £537,000.

Homeowners aged over-55 living in the South East and London could release £105,000 and £145,000 respectively if they wanted to. Those in East Anglia had the third-highest levels of equity, of £70.1bn collectively or £89,000 per household.

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While homeowners in the North East and Scotland had the lowest average amounts of equity in their homes, of £45,000 and £54,000 respectively.

It comes as the number of equity release borrowers fell by 29 per cent in the first three months of the year to 16,691, according to the Equity Release Council.

The figures were collated by using data from Halifax which showed that property prices fell across all regions during the last quarter of 2022.

‘Releasing equity remains a significant financial decision’

Sadna Zaman, proposition development manager for Canada Life Home Finance, said: “While the amount of equity release available has fallen as a result of strong economic headwinds and the slowing of the UK housing market, in today’s challenging environment, equity release can provide both flexibility and certainty.

“Releasing equity remains a significant financial decision, however it has an increasingly valuable role to play in retirement planning for years to come. With the right advice, equity release can offer flexible ways to meet individual customer circumstances and will no doubt continue to adapt as their needs change over time.”