Retired homeowners earn £1,700 from their houses
22 March 2017
- Over-65 homeowners’ property wealth hits new record of £1.072 trillion, Key Retirement Pensioner Property Index shows
- Total over-65 homeowner property wealth grew £7.4 billion since November
- Average homeowner gains £66,000 since 2010
Retired homeowners have earned £1,700 from their houses in the past three months as their property wealth hit a record high, new analysis* from leading over-55s financial specialist keyadvice.co.uk shows.
Total property wealth owned by over-65s who have paid off their mortgages grew to a new record high of £1.072 trillion in February.
More than £7.66 billion has been added to the property wealth of the UK’s over-65 homeowners since November as the housing market continues to expand across most of the country.
The long-term success story of property investment is underlined by Key’s index. Since the group started analysing over-65s housing wealth in 2010 retired homeowners have seen growth of 37% - or £290 billion - which is worth around £66,000 on average for every homeowner. Owning a home has been worth around £9,400 a year for over-65s.
Key’s Pensioner Property Equity Index shows only over-65s in London and Scotland saw the value of their total property wealth drop in the past three months. However retired London homeowners still own £177 billion of property wealth.
Retired homeowners in East Anglia saw the biggest growth in the past three months, and are now £4,265 better off while over-65s in the South East, Yorkshire & Humberside and the North East all saw gains of more than £3,400 each.
The ongoing strength of the housing market highlights how property wealth can make a major contribution to retirement standards of living as the equity release market expands. Average equity release customers** are cashing in £78,000 of property wealth and as much as £143,000 in London.
Dean Mirfin, Technical Director at www.keyadvice.co.uk said: “Property investment has consistently delivered for retired homeowners over the past seven years and the £1,700 gained over the past three months underlines its success story.
“During a period of historically low interest rates and investment market volatility, pensioners who have paid off mortgages have been able to rely on tax-free returns from their homes no matter what the short-term ups and downs have been.
“The average payouts taken through equity release of £78,000 are enabling retired homeowners to address a wide range of financial issues, including helping family and/or friends, to paying for holidays and home improvements. Repaying debt is also a major reason for releasing equity”
The table below shows the detailed picture across Great Britain
|Average change in value of home equity for homeowners aged 65+ (between November 2016 and February index)||Combined change in value of home equity for homeowners aged 65+ (between November 2016 and February index)|
|South East||increase of £3,417||+£2.241 billion|
|London||decrease of £3,846||-£1.407 billion|
|South West||increase of £1,546||+£968.723 million|
|North West||increase of £1,414||+£948.794 million|
|East Anglia||increase of £4,265||+£2.013 billion|
|East Midlands||increase of £1,349||+£581.688 million|
|West Midlands||increase of £777||+£278.476 million|
|Yorks/Humbs||increase of £3,586||+£44.728 million|
|Scotland||decrease of £1,453||-£409.746 million|
|Wales||increase of £1,789||+£473.369 million|
|North East||increase of £3,418||+£939.95 million|
|GREAT BRITAIN||+£1,678||+£7.663 billion|
The table below shows over-65s in the North West are most likely to own outright with 671,000 having paid off mortgages compared with 656,000 in the South East.
|Estimated property equity in homes owned outright by people aged 65+ (November 2016)||Estimated percentage of total value of property equity belonging to people aged 65+ (November 2016)||Number of households in the region owned outright by people aged 65+|
|South East||£207.313 billion||19.34%||656,000|
|South West||£152.143 billion||14.19%||626,600|
|East Anglia||£132.874 billion||12.39%||472,000|
|North West||£102.165 billion||9.53%||671,000|
|East Midlands||£76.231 billion||7.11%||431,200|
|West Midlands||£64.987 billion||6.06%||358,400|
|North East||£35.373 billion||3.3%||275,000|
|GREAT BRITAIN||£1.072 trillion||4,409,400|
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