The total value of property wealth owned outright by UK over-65s has climbed by £167.02bn over the last 12 months, new figures published by Key Later Life Finance have indicated.

This equates to an average £16,658 for each homeowner who has paid off their mortgage in the last year, worth an increase of almost £1,400 a month since January 2022.

Key’s data estimates that the total property wealth for over-65s now stands at £3.02trn, with older homeowners in all parts of the UK benefiting from movements in house prices. In particular, older homeowners in London have seen the biggest individual gains, at £23,974, an average of close to £2,000 a month for the past year.

The South East and South West regions have seen the biggest total collective gains at £30.2bn and £23.2bn, respectively. At the other end, Scotland saw the smallest individual gains, but homeowners are still £2,230 better off than they were a year ago.

“While there is no doubt that we have started to see prices falling in 2023, the gains homeowners saw in early 2022 still mean that they are over £16,000 better off than in January last year,” said Key CEO, Will Hale.

“A strong housing market is important for the economy, and we are starting to see some green shoots with mortgage approvals rising but that said inflation rather than house prices are likely to be older homeowners’ biggest source of concern.”

When put into context, Key equated the average £16,658 gain in housing wealth since January 2022 to just over 32 weeks income for the average pensioner couple (£515) or a year and 17 weeks of income for a single pensioner (£239).

“Retirees spending patterns mean that they use a disproportionate amount of their often fixed income to cover utilities, groceries and other basics so the 9.2% rate of income hits them particularly hard,” Hale added. “While the recent state pension increases will no doubt be welcome, more older people than ever are having to make hard choices around their finances.

“Accessing the £3.02trn worth of equity tied up in their homes can help with both short-term and longer-term needs. Whether it is boosting income, repaying borrowing, supporting family or making your home more energy efficient, people need to realise they have flexible products to consider.”

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