Exploring ‘Housing Asset-based Welfare’. Can the UK be Held Up as an Example for Europe?

Abstract

In the UK, homeownership has become increasingly important as a financial asset used for welfare needs, particularly during old age. It has been suggested that other European countries will follow the example of the UK. Traditionally, homeownership has been regarded positively because of the low housing expenses associated with outright ownership and the financial benefit of having a nest-egg that can be released, if needed, by selling. New mortgage equity release products reduce liquidity constraints and are regarded as promising in the context of changing welfare states. This research focuses on household strategies. It finds that housing assets play a role in households' financial planning in all countries within the study, particularly where welfare levels are low or decreasing. Homeownership was used in the traditional way in all countries, but it is only in the UK that households have adopted mortgage equity release products to cash in their housing equity for welfare needs.