With the seemingly inexorable rise in house prices, many homeowners in Cambridge and the surrounding villages are sitting on considerable sums of equity. Indeed, Datamonitor estimates that babyboomers alone (those between 50 and 60 years old) hold around £550 billion of equity in their properties.
But what’s the best thing to do with all the extra cash? Andrew Bush, Managing Director of Bush Property Services, has some ideas.
“If you’ve bought a house in the last 20 years, it’s been almost impossible not to make money on it,” says Mr Bush, “And there are a number of different options available to make the most of your extra wealth.
“You could, for example, simply trade up to a bigger house and use the money gained on the sale of your existing property as a deposit on your new home, thus reducing your mortgage outlay.
“Equally, you could decide to take the profits from the home and downsize to a smaller property. This is particularly relevant if the children have left home or you’re thinking of retirement. In any event, the spare cash could be used to put your children through university, to set them up in their own first homes, or even to pay for an overseas bolthole.
“Using the equity on your existing home can be equally effective. Renovations, extensions, a pool or landscaping can improve your lifestyle as well as the value of the property.
“Whatever you decide to do with the equity, make it work for you. Perhaps buy a second home as a buy to let investment, or even take it out of property altogether and expand, or start, a portfolio of shares or other financial stocks.
“Used wisely, equity can help you build wealth. Whatever you do, if you’re at all unsure as to the right way to proceed, always ensure you seek independent financial advice.”