Retired homeowners have seen their property wealth grow by an average £7,100 each in the past year, according to new research from Key Retirement Solutions.
Pensioners who own their homes outright have earned nearly £600 a month from their houses and their property wealth is now at its highest level since Key Retirement Solutions started monitoring the housing wealth of the over-65s in March 2010.
Its Pensioner Property Equity Index shows over-65 homeowners now own property wealth of £801.112 billion outright after an increase of more than £33.334 billion in the past year as house prices across most of the UK increased.
The growth in property prices underlines the success of the equity release market which enables homeowners to release money from their houses – Key Retirement Solutions figures show more than £1 billion was released in 2013.
Retired homeowners in London were the biggest winners gaining more than £41,200 on average each in the past year while retired homeowners in the South East are more than £10,460 better off and Scottish pensioners have gained £8,553 on average.
But not all areas of the country have gained – over-65 homeowners in the North East saw their average property wealth fall by £708 in the past year while those in the North West lost £722. Gains in Yorkshire & Humberside were just £8 over the year.
Every other region saw gains with pensioners in the South West gaining more than £6,000 and those in Wales earning £3,066 over the year from their homes.
Key Retirement’s figures show more than 36.5% 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 £147.787 billion while in the South East pensioners own £144.65 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: “Pensioner property wealth is at a record high of £801 billion as the housing market continues to grow strongly and average gains of more than £7,000 in the year highlights how property wealth can play a major role in improving retirement standards of living.
“On average retired homeowners have nearly £600 a month which compares very well with every other source of retirement income. Even those in areas where prices have fallen still have considerable property wealth considering they probably bought their homes more than 25 years ago.
“Independent advice is crucial however when considering how to use property wealth to improve retirement income whether people are downsizing to a new home or releasing equity from their current home.”
