Retirees earn £1,000 from their homes

Retired homeowners saw their property wealth increase by more than £1,000 over the last 12-months, despite current housing market uncertainty, analysis from equity release adviser Key revealed.

However, this increase can only be seen on an annual basis, with retired homeowners witnessing their property wealth increase by £5.445bn between June 2018 and June 2019, Key’s Pensioner Property Equity Index found.

When compared to February 2019, total property wealth owned by over-65s who have paid off mortgages is valued at £1.096trn, falling from £1.118trn, as the trembles of the property market start being felt across the board.

Since Key began analysing the mortgage-free property wealth of the over-65s in 2010, retired homeowners have benefited from growth of 41 per cent – more than £316bn – earning them gains of £67,000 in almost a decade. Across the UK, average gains for the over-65s in property wealth in the past year are equivalent to £1,160 each.

Those mortgage-free over-65s in the West Midlands are almost £7,500 better off than a year ago, while retired homeowners in Wales and the North West also recorded strong gains of £6,560 and £6,297, respectively.

Despite this, retired homeowners in London have lost more than £1,000 per month in the past year, while over-65s in the South East and East Anglia have also seen property wealth values fall. Scottish retired homeowners also saw their property wealth dip slightly.

While those living in the areas have seen their property wealth fall, London and the South East still accounted for more than a third (34 per cent) of all property wealth held by retired homeowners despite the recent falls.

Commenting on the findings, Key CEO Will Hale said: “The ongoing uncertainty in the property market and the economy as a whole is having an impact on house prices but overall retired homeowners have still gained an average of more than £1,000 from their houses in the past year.

“Some parts of the country have experienced even bigger gains with the West Midlands, North West and Wales continuing to perform strongly. The basic fact is that no matter what happens month to month to house prices millions of over-65s will continue to hold considerable property wealth which can transform their standard of living in retirement and enable them to address a wide range of financial issues.

“Increasingly equity release customers are able to help their adult children or even grandchildren to pay for house deposits while also being able to sort out their own finances whether it is clearing debts or even paying off mortgages. Equity release is not right for everyone but it is clear that if your home is your largest asset you should take some time to assess what role property wealth can play in retirement planning.”

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