Wales’ mortgaged homeowners are sitting on an estimated £13.8 billion in usable home equity that could generate long-term returns for Welsh families and the nation’s wider economy while the housing market remains volatile and subject to dips, according to new research commissioned by fintech company Selina Finance.
Leveraging this equity at a household level via flexible secured credit could pay for renovations or other significant life expenses that many consumers are struggling to fund, prompting renewed debate about the relevance of ‘traditional’ approaches to borrowing in an era of slow economic growth.
According to the Selina Finance Home Equity Report 2026, the average Welsh household has built up £36,626 in usable equity, based on an average adjusted house price of £224,700. This is a substantial amount or equity per household, and could be used for other financial needs such as home improvements.
“These data indicate that a significant proportion of usable home equity across Wales remains illiquid and in many cases under-utilised,” said Hubert Fenwick, Co-Founder and Chief Executive Officer at Selina Finance.
“As the structure of homeownership evolves with people buying later and carrying debt for longer, it is worth considering whether traditional approaches to housing equity remain appropriate. In a higher-rate environment, Welsh households are becoming more cautious about major financial decisions, including moving home. Instead, many are choosing to stay put, reassessing how to invest in better use of their existing home and the value they already have.”
The report’s findings have emerged against the backdrop of long-term structural changes within the Welsh housing market, which are altering how and when housing wealth accumulates. According to ONS data, house prices in Wales have increased significantly relative to earnings, with the average home now valued at 6 times income, compared to 2-3 times in 1975. The average age of a first-time buyer in Wales is 30 while mortgage terms across the whole UK have lengthened with 30 to 35-year borrowing becoming more common. These trends mean many homeowners are acquiring property later in life and remaining in debt for longer.
Selina Finance estimates that more efficient use of home equity could reduce borrowing costs significantly, with potential annual savings of up to £18.7 billion across UK homes, equivalent to around £2,315 per household.
Against a backdrop of rising borrowing costs and tightening affordability, the report also asked homeowners what they would do with usable home equity if they had it. Over 38% of the 1500 respondents from across the UK indicated they would prioritise home extensions or renovations over other actions including purchasing a second property or paying off existing higher-interest debt. In the survey, bedroom and kitchen extensions were the most popular desired home upgrades (29%) ahead of bathroom and kitchen renovations (22%) and energy efficiency upgrades (15%).
The report also contrasts the UK with the United States, where home equity is more commonly used as a flexible financial tool. The US market for Home Equity Lines of Credit (HELOCs) has grown to approximately $422 billion as of Q3 2025, with such products increasingly used to manage cash flow, fund investments and reduce reliance on higher-cost borrowing. In the UK by contrast, borrowing remains more concentrated in mortgages in an environment where attitudes towards borrowing tend to be more cautious.