The property wealth of retired homeowners has grown by over £20.3 billion in the past three months as the housing market has continued to grow, according to new research from Key Retirement Solutions.
Pensioners who own their homes outright have earned an average of £4,341 each from their houses – the equivalent of nearly £1,500 a month – taking their property wealth to a new record high.
Total pensioner property wealth has increased by £47.8 billion since Key Retirement Solutions started monitoring the housing wealth of the over-65s in January 2010.
Its Pensioner Property Equity Index shows over-65 homeowners now own property wealth of £827.796 billion outright as house prices across almost all of the UK rose.
The growth in property prices is helping to drive the equity release market which enables homeowners to release money from their houses – Key Retirement Solutions figures show £641 million was released in the first half of 2014 with the average customer taking around £65,000 from their home.
Retired homeowners in London were the biggest winners gaining an average of more than £23,100 each in the past three months, while retired homeowners in the South East are more than £6,900 better off and pensioners in Scotland are nearly £5,700 better off.
Only retired homeowners in the North East saw a fall in housing wealth with average losses of more than £750.
Key Retirement’s figures show more than 37% of pensioner property equity is owned by over-65s in London and the South East. In London over-65s own property without any mortgages worth £160.1 billion while in the South East pensioners own £149 billion of property outright. More than 70% of pensioner property wealth is concentrated in London, the South East, the South West, the East of England and the North West.
Dean Mirfin, group director at Key Retirement Solutions, said: “Pensioners who own their homes outright are among the biggest winners from the strength of the housing market and average gains of more than £4,300 in three months demonstrate the importance of property wealth.
“Those approaching, or at, retirement shouldn’t overlook the value of their property when planning for the future. The new pension reforms coming into effect in April 2015 make a holistic approach to retirement planning even more important. Pensioners should seek advice to ensure they are aware of all the options available to them.”
