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Retired homeowners earn £3,000 from their houses

04 March 2020

Retired homeowners saw their property wealth increase by more than £3,150 in the past year despite the impact of political and economic uncertainty on the housing market, analysis* from UK’s leading independent equity release adviser Key shows.
 
Total property wealth owned by over-65s who have paid off mortgages is valued at £1.133 trillion and has increased by £14.78 billion in the past year which equates to a gain of £3,152 for average retired homeowners, Key’s Pensioner Property Equity Index reveals.
 
Key’s data shows the total value of pensioner property fell to £1.096 trillion in the early part of last year before recovering in the autumn to £1.132 trillion. Gains since the autumn have been modest but retired homeowners have still seen strong year-on-year increases.
 
The long-term gains have been even more impressive. Since Key started analysing the mortgage-free property wealth of the over-65s in 2010 retired homeowners have benefited from growth of 45% - a total of nearly £354 billion - earning them gains of £75,000 in the past 10 years.
 
The biggest winners in the past year are over-65s in Wales who have seen gains of £11,700 while retired homeowners in the West Midlands (£8,165), East Midlands (£5,799) and the North West (£4,355) have also done better than average.
 
The only region to suffer substantial falls was East Anglia where retired homeowners are £3,267 worse off over the year. Homeowners in the South East saw marginal price falls of £149 over the year.
 
The South East still accounts for nearly a fifth (18.9%) of all property wealth held by retired homeowners despite the slight drop while East Anglia is the fourth-wealthiest region in terms of mortgage-free property held by over-65s.
 
 Will Hale, CEO at Key said: “Political and economic uncertainty hit the housing market last year but there were genuine signs of recovery towards the end of last year and retired homeowners who no longer have mortgages were big beneficiaries.
 
“Interestingly it was the over-65s in Wales who made the biggest gains – seeing the value of their property increase by nearly £1,000 a month – while those in East Anglia and the South East saw modest falls.  While it is useful to be aware of market fluctuations what happens on a monthly basis is unlikely to alter the simple fact that millions of over-65s retain considerable property wealth which can transform their standard of living in retirement and enable them to address a wide range of financial issues. 
 
“Increasingly, we are seeing people choosing to access property wealth in retirement and using modern lending features to suit their individual circumstances.  Choosing to use drawdown rather than lump sum and to repay the interest rather than letting it roll up make these products even more flexible and attractive than before.”
 
The table below shows the detailed picture across Great Britain with nine areas seeing growth and two recording losses.
 


Region
Average change in value of home equity for homeowners aged 65+ (past year) Combined change in value of home equity for homeowners aged 65+ (past year)
South East Down £149 Down £97.744 million
London Up £1,849 Up £676.734 million
South West Up £3,591 Up £2.250 billion
North West Up £4,355 Up £2.922 billion
East Anglia Down £3,267 Down £1.542 billion
East Midlands Up £5,799 Up £2.500 billion
West Midlands Up £8,165 Up £2.926 billion
Yorks/Humbs Up £1,784 Up £514.862 million
Wales Up £11,700 Up £3.095 billion
Scotland Up £3,290 Up £927.28 million
North East Up £2,228 Up £612.700 million
GREAT BRITAIN Up £3,152 +£14.787 billion
 
 
 
The table below shows more over-65s in the North West have paid off mortgages with 671,000 owning their homes outright compared with 656,000 in the South East and 626,000 in the South West.

Region
Estimated property equity in homes owned outright by people aged 65+ Estimated percentage of total value of property equity belonging to people aged 65+ Number of households in the region owned outright by people aged 65+ Number of over-65s households in the region
South East £214.273 billion 18.9% 656,000 1,130,300
London £174.017 billion 15.35% 366,000 674,780
South West £162.764 billion 14.36% 626,600 787,000
East Anglia £137.484 billion 12.13% 472,000 782,690
North West £113.641 billion 10.02% 671,000 873,590
East Midlands £85.287 billion 7.52% 431,200 591,900
West Midlands £73.198 billion 6.46% 358,400 701,270
Yorks/Humbs £47.804 billion 4.22% 288,600 653,860
Wales £45.663 billion 4.03% 264,600 419,380
Scotland £43.653 billion 3.84% 282,000 660,070
North East £35.945 billion 3.17% 275,000 335,430
GREAT BRITAIN £1.133 trillion   4,691,400 7,610,270
 
 
 Anyone looking to release equity from their home can get Key’s independent guide to equity release by calling 0800 531 6027 or visiting https://www.keyadvice.co.uk/equity-release/is-it-right-for-me
 
ENDS
Notes to Editors
 
* Key’s Pensioner Property Equity Index tracks the amount of equity held in property by people over 65 years old in Great Britain. Figures are based on analysis of data from the ONS Family Spending Report (2014), the UK House Price Index, Registers of Scotland House Price Statistics and ICM (2019) and Key’s UK Equity Release Market Monitor.
 
Lee Blackwell
Director of Public Relations and Public Affairs
Key Retirement Group
07384511140
E-mail: [email protected]
 
Rachel Mann
Key Retirement Group
01772 269363
E-mail: [email protected]
 
 
Citigate Dewe Rogerson
Alannah Sims
0207 025 6563
E-mail: [email protected]
 
 
About Key
  • Part of Key Group, Key is the UK’s largest independent equity release adviser – committed to high levels of customer service and the belief that good advice is key to ensuring people make smart sustainable choices around how they use their housing equity.
  • With over 60 industry and consumer awards under their belt, the Key team offer advice on equity release, later life mortgages and retirement interest-only products.  The company also provides support with estate planning including wills and lasting power of attorneys.
  • Key is committed to putting customers at the heart of what it does and has a score of 4.9 / 5.0 from almost 15,000 scores on the independent review site, Trustpilot. 
  • Key is committed to being independent, transparent and straightforward.