Retired homeowners earn £127 billion in a year from their houses
20 June 2017
- Homeowners over 65 years of age have property wealth of £1.054 trillion, Key Retirement’s Pensioner Property Index shows
- Annual growth achieved despite property market slowdown hitting property wealth in past three months
Retired homeowners have each earned more than £2,400 a month from their houses in the past year, new analysis* from leading over-55s financial specialist Key Retirement shows.
Total property wealth owned by over 65s who have paid off their mortgages is now worth £1.054 trillion, with average retired homeowners making £29,010 in the year to May.
More than £127 billion has been added to the property wealth of the UK’s homeowners aged over 65 in the past year despite the recent slowdown in the housing market.
The long-term success story of property ownership is underlined by Key’s index. Since the group started analysing over 65s housing wealth in 2010 retired homeowners have seen growth of 35%, or £274 billion. Owning a home has been worth around £62,000 over the past seven-and-a-half years.
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 year. However, retired London homeowners still own £172.65 billion of property wealth.
Retired homeowners in East Anglia saw the biggest growth in the past year, and are now £56,138 better off - the equivalent of nearly £4,700 a month. Over 65s in the South East and South West saw gains of more than £40,000 each, while retired homeowners in the West Midlands made nearly £40,000.
The long-term financial benefits of owning a house is underlined by average equity release payouts of £73,610, and as much as £117,000 in London. However Key’s index shows property prices across all the regions monitored have fallen in the past three months.
Dean Mirfin, Technical Director at Key said: “Owning a house has been a major investment success for retired homeowners and the average gain of £29,000 demonstrates the contribution property wealth can make to retirement planning.
“Pensioners who have paid off mortgages have been able to rely on consistent tax-free returns from their homes, no matter what the impact of historically low interest rates and market uncertainty has been.
“Whatever happens in the property market homeowners will always have a major asset that can make a major contribution to their retirement standard of living whether it is generating extra income or capital to help loved ones.”
The table below shows the detailed picture across Great Britain
|Average change in value of home equity for homeowners aged 65+ (between May 2016 and May 2017 index)||Combined change in value of home equity for homeowners aged 65+ (between May 2016 and May 2017 index)|
|South East||increase of £44,785||+£29.379 billion|
|London||decrease of £63,043||-£23.074 billion|
|South West||increase of £43,137||+£27.029 billion|
|North West||increase of £34,232||+£22.969 billion|
|East Anglia||increase of £56,138||+£26.497 billion|
|East Midlands||increase of £35,994||+£15.521 billion|
|West Midlands||increase of £39,765||+£14.252 billion|
|Yorks/Humbs||increase of £27,765||+£8.013 billion|
|Scotland||decrease of £22,059||-£6.221 billion|
|Wales||increase of £25,525||+6.754 billion|
|North East||increase of £24,717||+£6.797 billion|
|GREAT BRITAIN||+£29,010||+£127.92 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+ (May 2017)||Estimated percentage of total value of property equity belonging to people aged 65+ (May 2017)||Number of households in the region owned outright by people aged 65+|
|South East||£204.353 billion||19.38%||656,000|
|South West||£150.523 billion||14.28%||626,600|
|East Anglia||£130.804 billion||12.41%||472,000|
|North West||£100.818 billion||9.56%||671,000|
|East Midlands||£75.983 billion||7.21%||431,200|
|West Midlands||£64.617 billion||6.13%||358,400|
|North East||£33.632 billion||3.19%||275,000|
|GREAT BRITAIN||£1.054 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