UK pensioner property wealth rockets to £861bn

26th March 2015


Retired homeowners have collectively witnessed their property wealth grow by more than £33bn in the past six months with the housing boom earning the average pensioner nearly £1,200 a month, new analysis from over-55s financial specialist Key Retirement claims.

Its research concluded that pensioners who own their homes outright have earned an average of £7,117 each from their properties over the past six months taking their property wealth to a new record high.

In the five years since Key started monitoring the housing wealth of the over-65s, total pensioner property wealth has increased by £81.27bn – the equivalent of £17,323 each. As a result its Pensioner Property Equity Index shows over-65 homeowners now own property wealth of more than £861bn outright.

The growth in property prices is helping to drive the equity release market which enables homeowners to release wealth from their homes – Key’s figures show a record high of £1.38bn was released last year with the average customer taking around £64,800 from their home.

Retired homeowners in London were the biggest winners gaining an average of more than £20,675 each in the past six months, while homeowners in the South East are more than £14,123 better off. Only retired homeowners in the North East saw a fall in housing wealth with average losses of £581 in the six months.

The firm’s statistics show nearly a fifth of all pensioner property equity is owned by over-65s in London with total wealth of £167bn and nearly two-thirds of pensioner property wealth is concentrated in London, the South East, the South West and East Anglia.

Dean Mirfin, group director at Key Retirement said: “Retired homeowners have huge assets in their houses with total property wealth hitting an all-time high of £861bn.

“In the past five years they’ve made an average of more than £17,000 each from their homes, which is an impressive return with interest rates at historic lows. Even if or when the property market cools they will still have a major asset. With equity release rates at their lowest in 10 years and the long term trend for rates continuing to go down, we expect the market to continue to expand.”

The 11 areas of Britain monitored by Key’s index with 10 recording gains:

Average change in value of home equity for homeowners aged 65+ (between August index and February index) Combined change in value of home equity for homeowners aged 65+ (between August and February index)
London increase of £20,675 +£7.567 billion
South East increase of £14,123 +£9.264 billion
South West increase of £6,152 +£3.854 billion
North West increase of £3,956 +£2.654 billion
East Anglia increase of £13,105 +£6.185 billion
East Midlands increase of £3,954 +£1.704 billion
West Midlands increase of £2,139 +£766.167 million
Scotland increase of £3,075 +£867.15 million
Yorks/Humbs increase of £709 +£204.671 million
Wales increase of £1,823 +£482.365 million
North East £581 decrease -£159.77 million
GREAT BRITAIN +£7,117 +£33.392 billion



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