Retired home owners in the UK have seen their property wealth grow by nearly £17.5 billion in the past three months as house prices continue to climb, new research shows.
Pensioners who own their homes outright have gained an average of £3,725 each from their houses in the past three months taking their property wealth to a new record high, according to the index from over 55s financial specialist Key Retirement.
In the five years since Key started monitoring the housing wealth of the over 65s, in January 2010, total pensioner property wealth has increased by 14% or £111 billion which equates to £23,700 on average for every home owner.
The Pensioner Property Index shows over 65 home owners now own property wealth of £891.249 billion outright with pensioners across almost all of the UK benefiting.
Key believes the strong growth in property prices will drive expansion of the equity release market further which enables homeowners to release wealth from their homes. Customers releasing property wealth are taking around £68,500 on average, its figures show.
Retired home owners in London were the biggest winners gaining an average of around £14,238 each in the past three months, while home owners in the South East of England are more than £8,290 better off and pensioners in East Anglia are £8,524 better off.
Key’s figures show a fifth of all pensioner property equity is owned by over 65s in London with total wealth of £178.894 billion. Nearly two thirds of pensioner property wealth is concentrated in London, the South East, the South West and East Anglia.
‘The strength of the housing market is reflected in the growth in the amounts being released through equity release plans which are now an average £68,500, an amount which dwarfs the average pension pot in the UK,’ said Dean Mirfin, technical director at Key Retirement.
‘The success of property investment for millions of over 65s home owners highlights how homes are major assets which should be considered as part of anyone’s retirement planning,’ he explained.
‘Property prices rise and fall but over 65 home owners control more than £891 billion in assets which can make a major contribution to enhancing retirement lifestyles. Pensioners however need specialist advice before accessing their property wealth,’ he added.