29th September 2014
Pensioners who own their own home have added £4,000 to their property wealth over the past three months as house prices soar.
Retired homeowners, who typically own their homes outright, have seen their combined property wealth grow by more than £20.3 billion in the past three months, with each earning an average of £4,341 from their house – the equivalent of nearly £1,500 a month.
The latest round of property growth takes pensioner property wealth to a record high. The wealth held in bricks and mortar by Britain’s over-65s has increased £47.8 billion since January 2010, according to Key Retirement Solutions, to total £827.8 billion outright.
The increase in home values has encourage more pensioners to use their house to access cash using equity release. Key Retirement Solutions’ figures show £641 million was released in the first half of 2014, with the average customer taking £65,000 from their home.
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 demonstrates 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.’
Unsurprisingly, pensioners in London were the biggest winners as house price rises continue upwards at an astonishing rate. The average retired homeowner in London has gained an average of more than £23,100 in the past three months, while those in the South East are £6,900 better off and in Scotland they are nearly £5,700 better off.
Only retired homeowners in the North East saw a fall in housing wealth, with an average loss of more than £750 over the past three months.
More than 70% of pensioner property is concentrated in London, the South East, the South West, the East of England and the North West. Over a third, 37%, of pensioner property equity is owned by over-65s in London and the South East and in London over-65s own property without any mortgage worth £160.1 billion.