The average retired over-65 homeowner has gained more than £7,100 in the past year from their house, Key Retirement Solutions Pensioner Property Index shows. Retired homeowners have seen their property wealth grow by an average £7,100 each in the past year as the housing market boom has sent home prices soaring, new research from leading over-55s financial specialist Key Retirement Solutions shows.

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Pensioners who own their homes outright have earned nearly £600 a month from their houses

Pensioners who own their homes outright have earned nearly £600 a month from their houses and their property wealth is now at its highest level since Key Retirement Solutions started monitoring the housing wealth of the over-65s in March 2010.

Its Pensioner Property Equity Index shows over-65 homeowners now own property wealth of £801.112 billion outright after an increase of more than £33.334 billion in the past year as house prices across most of the UK increased. The growth in property prices underlines the success of the equity release market which enables homeowners to release money from their houses – Key Retirement Solutions figures show more than £1 billion was released in 2013.


Retired homeowners in London were the biggest winners gaining more than £41,200 on average each in the past year while retired homeowners in the South East are more than £10,460 better off and Scottish pensioners have gained £8,553 on average. But not all areas of the country have gained – over-65 homeowners in the North East saw their average property wealth fall by £708 in the past year while those in the North West lost £722. Gains in Yorkshire & Humberside were just £8 over the year.

Independent advice is crucial

Every other region saw gains with pensioners in the South West gaining more than £6,000 and those in Wales earning £3,066 over the year from their homes. Key Retirement’s figures show more than 36.5% of pensioner property equity is owned by over-65s in London and the South East. In London over-65s own property without any mortgages worth £147.787 billion while in the South East pensioners own £144.65 billion of property outright. More than 70% of pensioner property wealth is concentrated in London, the South East, the South West, the East of England and the North West.

Dean Mirfin, Group Director at Key Retirement Solutions, said: “Pensioner property wealth is at a record high of £801 billion as the housing market continues to grow strongly and average gains of more than £7,000 in the year highlights how property wealth can play a major role in improving retirement standards of living.

“On average retired homeowners have nearly £600 a month which compares very well with every other source of retirement income. Even those in areas where prices have fallen still have considerable property wealth considering they probably bought their homes more than 25 years ago. Independent advice is crucial however when considering how to use property wealth to improve retirement income whether people are downsizing to a new home or releasing equity from their current home.”

The table below shows the 11 areas of Great Britain monitored by Key Retirement Solutions’ index with nine seeing gains.

Region

Average change in value of home equity for homeowners aged 65+ (between 2013 index and 2014 index)

Combined change in value of       home equity for homeowners aged   65+ (between 2013 index and 2014 index)
London    +£41,200     +£15.079 billion
South East    +£10,463     +£6.863 billion
South West    +£6,021     +£3.772 billion
North West    -£722     -£484.462 million
East    +£5,085     +£2.400 billion
East Midlands    +£4,178     +£1.801 billion
West Midlands    +£2,429     +£870.553 million
Scotland    +£8,553     +£2.411billion
Yorks/Humbs    +£8     +£2.308 million
Wales    +£3,066     +£811.263 million
North East    -£708   -£1.947 billion
GREAT BRITAIN    +£7,105   +£33.334 billion

 

The table below shows over-65 homeowners in the North West are most likely to own their home outright – Key Retirement’s analysis shows 671,000 own their homes without mortgages compared with 656,000 in the South East. However higher property prices in London means over-65 homeowners there have the most property wealth.

Region Estimated property equity in homes owned outright by people aged 65+ (end January 2014) Estimated percentage of total value of property equity belonging to people aged 65+ (end January 2014) Number of households in the region owned outright by people aged 65+
London £147.787 billion 18.45% 366,000
South East £144.653 billion 18.06% 656,000
South West £110.772 billion 13.83% 626,600
East £85.285 billion 10.65% 472,000
North West £73.815 billion 9.21% 671,100
East Midlands £54.736 billion 6.83% 431,200
West Midlands £47.237 billion 5.9% 358,400
Scotland £45.210 billion 5.63% 282,000
Yorks/Humbs £33.481 billion 4.18% 288,600
Wales £31.923 billion 3.91% 264,600
North East £26.838 billion 3.35% 275,000
GREAT BRITAIN £801.112 billion   4,691,500

Anyone looking to release equity from their home can request an independent guide to equity release by visiting https://www.keyrs.co.uk/free-guide.