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Over-65s make £561 a month from their homes

19 April 2021

Over-65s saw their property wealth increase by more than £561 a month as the housing market continued to surge thanks to the Stamp Duty holiday and Budget measures to help first-time buyers, analysis* from UK’s leading independent equity release adviser Key shows.
 
Growth in Property Wealth Outstrips Pension Income:
Key’s data shows over the long-term their gains have been even more impressive. Since Key started analysing the mortgage-free property wealth of the over-65s in 2010 homeowners have seen growth of 58% - a total of more than £452 billion which is equivalent to £90,420 per household in the past 11 years.
 
While pensioner property wealth has increased significantly, over-65s have not seen the same boost to their incomes with the average pensioner income only rising £12 to £331 per week over the last eleven years**.  Under-75s have average weekly incomes of £370 after housing costs compared with £302 for over-75s.
 
Total property wealth owned by over-65s who have paid off mortgages is valued at £1.232 trillion after increasing by £8.436 billion over the past three months, Key’s Pensioner Property Equity Index reveals.
 
That equates to an average gain of £1,685 for every over-65s homeowner – around £561 a month – with people in East Anglia and Wales seeing gains of £10,000 and £8,300, respectively.
 
The only region to see property values drop in the past three months was the South West where average prices are around £738 lower in the past three months.  The South East accounts for a fifth of all property wealth held by the over-65s with the South West and East Anglia accounting for nearly 29% of all property wealth held by over-65s.
 
Will Hale, CEO at Key said: “Over the last three-months, the property market has been buoyant – spurred on by the extension of the Stamp Duty Holiday and the launch of Government guarantees for over 95% LTV mortgages. That said, the market performance over the last eleven years has generally been positive and over-65s homeowners seen their property wealth increase by an average of £90,420 over the period.
 
“This puts into stark contrast the increase in average weekly pension income which jumped just £12 between 2010 and 2020.  The retirement ambitions and needs of today’s over-65s as well as inflation make this increase seem even smaller and highlights how important it is for people to consider all their assets at retirement.  
 
“Sitting in a quarter of a million pound home unable to keep the heating on or meet other day-to-day living costs makes no sense.  Today’s modern equity release products can help people access some of the value tied up in their properties to address these issues and then through flexible features enable them to manage their borrowing by choosing to make ad hoc capital repayments or to service the interest if they wish.”
 
The table below shows the detailed picture across Great Britain with 10 areas seeing growth and only the South West recording a fall in property values.
 


Region
Average change in value of home equity for homeowners aged 65+ (past three months) Combined change in value of home equity for homeowners aged 65+ (past three months)
South East Up £5,657 + £4.114 billion
London Up £4,835 + £1.256 billion
South West Down £738 - £485.29 million
North West Up £7,528 + £3.937 billion
East Anglia Up £10,063 + £5.532 billion
East Midlands Up £5,346 + £2.295 billion
West Midlands Up £1,957 +£746.43 million
Yorks/Humbs Up £4,798 + £2.219 billion
Wales Up £8,303 +£3.079 billion
Scotland Up £2,589 + £991.02 million
North East Up £1,889 + £441.27 million
GREAT BRITAIN Up £1,685 +£8.436 billion
 
 
The table below shows more over-65s in the South East have paid off their mortgages with 727,000 owning their homes outright compared with 666,614 in the South West and 549,784 in East Anglia. London has the second lowest number of over-65s owning homes outright at 259,801 ahead of the North East on 233,601.
 

Region
Estimated property equity in homes owned outright by people aged 65+ Estimated % of total value of property equity belonging to people aged 65+ No. of households in the region owned outright by people aged 65+
South East £249.056 billion 20.21% 727,343
South West £183.084 billion 14.85% 666,614
East Anglia £170.784 billion 13.86% 549,784
London £130.243 billion 10.57% 259,801
North West £99.947 billion 8.11% 542,504
East Midlands £90.130 billion 7.31% 429,340
Yorks/Humbs £82.910 billion 6.73% 462,544
West Midlands £80.270 billion 6.51% 381,417
Wales £66.348 billion 5.38% 370,852
Scotland £62.814 billion 5.1% 382,784
North East £32.272 billion 2.62% 233,601
GREAT BRITAIN £1.232 trillion   5,006,584

Page last updated: Thursday 17 June 2021