Pensioners Property Wealth Booms

Home Income Plans

Could Equity Release Help?

Pensioners Property wealth has hit a record high with retired homeowners “earning” £1,700 from their houses in the past three months alone, according to new (March 2017) research from leading over-55s financial specialist Key Retirement.  Key findings show:

  • Over-65 homeowners’ property wealth 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.
  • 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. 

RETIRED HOMEOWNERS EARN £1,700 FROM THEIR HOUSES.

Over-65 homeowners’ property wealth hits new record of £1.072 trillion, Key Retirement Pensioner Property Index shows.

Of course, the intention of this Press Release is to gently suggest that Equity Release is a great way of having more financial freedom in your retirement! There is some argument over what a trillion is, but generally speaking, the US version wins, to that means “pensioners” (the author is one!) property wealth is £1,072,000,000,000. In fact this greatly underestimates such wealth as many of us still have small mortgages, the heritage of bringing up expensive children, and the PR excludes anyone who still has a mortgage.  Strange, as many people use Equity Release as a way of releasing the pressure of mortgage payments. 

Total pensioners property wealth has grown £7.6 billion since November. In English that is £7,600,000,000.

Average homeowner gains £66,000 since 2010.

 

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 KeyRetirement.com 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

RegionAverage 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 Eastincrease of £3,417+£2.241 billion
Londondecrease of £3,846-£1.407 billion
South Westincrease of £1,546+£968.723 million
North Westincrease of £1,414+£948.794 million
East Angliaincrease of £4,265+£2.013 billion
East Midlandsincrease of £1,349+£581.688 million
West Midlandsincrease of £777+£278.476 million
Yorks/Humbsincrease of £3,586+£44.728 million
Scotlanddecrease of £1,453-£409.746 million
Walesincrease of £1,789+£473.369 million
North Eastincrease of £3,418+£939.95 million
GREAT BRITAIN+£1,678+£7.663 billio


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.

 

RegionEstimated 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 billion19.34%656,000
London£177.071 billion16.52%366,000
South West£152.143 billion14.19%626,600
East Anglia£132.874 billion12.39%472,000
North West£102.165 billion9.53%671,000
East Midlands£76.231 billion7.11%431,200
West Midlands£64.987 billion6.06%358,400
Yorks/Humbs£44.728 billion4.17%288,600
Scotland£39.917 billion3.72%282,000
Wales£39.207 billion3.66%264,600
North East£35.373 billion3.3%275,000
GREAT BRITAIN£1.072 trillion 4,409,400