Pensioner property wealth hits £874 billion
17 June 2015
Over-65 homeowners are £2,680 better off on average over three months, Key Retirement Pensioner Property Index shows
Retired homeowners have seen their property wealth grow by more than £12.5 billion in the past three months as house prices continue to climb earning the average pensioner nearly £900 a month, new analysis* from leading over-55s financial specialist Key Retirement shows.
Pensioners who own their homes outright have gained an average of £2,680 each from their houses in the past three months taking their property wealth to a new record high.
In the five years since Key started monitoring the housing wealth of the over-65s, in January 2010, total pensioner property wealth has increased by 12% or £93.85 billion which equates to £20,000 on average for every homeowner.
Its Pensioner Property Index shows over-65 homeowners now own property wealth of £873.77 billion outright with pensioners across almost all of the UK benefiting.
The growth in property prices will drive expansion of the equity release market which enables homeowners to release wealth from their homes - Key's figures showed. You can see how much you could potentially release with our equity release calculator.
Retired homeowners in London were the biggest winners gaining an average of around £16,260 each in the past three months, while homeowners in Scotland are more than £8,650 better off and pensioners in Yorkshire & Humberside are £4,063 better off.
However retired homeowners in Wales saw a fall in housing wealth with average losses of £2,230 in the three months while the North West and West Midlands also saw house price falls.
Key's figures show nearly a fifth of all pensioner property equity is owned by over-65s in London with total wealth of £173.683 billion. Nearly two-thirds of pensioner property wealth is concentrated in London, the South East, the South West and East Anglia.
Dean Mirfin, technical director at Key (www.keyadvice.co.uk), said: "Retired homeowners have huge assets in their houses with total property wealth hitting another all-time high of £873 billion highlighting the growing importance of housing for retirement planning.
"No matter what happens in the property market homeowners will always have a major asset which should be considered as part of retirement planning. Innovation in the equity release market and the launch of pension freedoms are opening up more ways for homeowners to use their property wealth.
"Retired homeowners, and those approaching retirement, should take advice on how their property wealth can generate additional capital and/or income. Advisers and lenders need to focus on a holistic approach to retirement planning which ensures that property wealth is considered alongside pension savings and other investments."
The table below shows the 11 areas of Great Britain monitored by Key's index with eight recording gains.
|Region||Average change in value of home equity for homeowners aged 65+ (between February and May index)||Combined change in value of home equity for homeowners aged 65+ (between February and May index)|
|London||increase of £16,261||+£5.951 billion|
|South East||increase of £2,006||+£1.315 billion|
|South West||increase of £2,415||+£1.513 billion|
|North West||£560 decrease||-£375.76 million|
|East Anglia||increase of £540||+£254.88 million|
|East Midlands||increase of £2,049||+£883.528 million|
|West Midlands||£246 decrease||-£88.166 million|
|Scotland||increase of £8,653||+£2.434 billion|
|Yorks/Humbs||increase of £4,063||+£1.172 billion|
|Wales||£2,231 decrease||-£590.322 million|
|North East||increase of £400||+£110 million|
|GREAT BRITAIN||+£2,680||+£12.581 billion|
The table below shows over-65 homeowners in the North West are most likely to own their home outright - Key's analysis shows 671,000 own their homes without mortgages compared with 656,000 in the South East.
|Region||Estimated property equity in homes owned outright by people aged 65+ (May 2015)||Estimated percentage of total value of property equity belonging to people aged 65+ (May 2015)||Number of households in the region owned outright by people aged 65+|
|South East||£160.220 billion||18.34%||656,000|
|South West||£118.707 billion||13.59%||626,600|
|East Anglia||£95.091 billion||10.88%||472,000|
|North West||£76.024 billion||8.7%||671,100|
|East Midlands||£58.226 billion||6.66%||431,200|
|West Midlands||£49.114 billion||5.62%||358,400|
|North East||£27.052 billion||3.1%||275,000|
|GREAT BRITAIN||£873.770 billion||4,691,500|
Anyone looking to release equity from their home can get Key's independent guide to equity release by calling 0800 531 6010 or visiting www.keyadvice.co.uk/equity-release/request-a-free-guide