Property wealth of over-65s increasing by more than £800 a month

Over-65s have seen their property wealth increase by more than £800 a month in the past six months, according to new research from Key.

The equity release adviser said that with the housing market benefitting from the stamp duty holiday, property owned outright by over-65s has increased in value by £24.23bn over the past six months, a figure worth an average £4,833 per older homeowner.

Their total property wealth now stands at £1.26trn with all parts of the UK benefiting from the stamp duty holiday, apart from London where property values fell as people looked to leave the capital and central London house prices underperformed, Key said.

The biggest gains in the past six months were in Scotland and the South East with over-65s gaining more than £13,000 and almost £12,000 respectively.

Key CEO, Will Hale, commented: “The recent end of the stamp duty holiday may cool the property market somewhat but over-65s homeowners will continue to have a substantial amount of wealth tied up in their houses.

“This wealth can be accessed through products such as equity release and be used by older homeowners to address financial needs and wants through later life.”

Since Key started analysing the mortgage-free property wealth of the over-65s in 2010, homeowners have seen growth of 61% – a total of more than £476bn which is equivalent to around £95,000 per household over the past 11 years.

However, Key suggested that over-65s have not seen the same boost to their incomes as they have seen to the value of their homes. The most recent government data shows that average pensioner incomes after housing costs have only risen £12 to £331 per week – the equivalent of 3.7% – over the last 11 years.

Hale added: “The 61% rise in the property wealth of over-65s over the past 11 years dwarfs single digit increases in average pensioner incomes over that period and underlines the case for advisers and customers considering all assets when looking at financial planning at and through retirement.

“Equity release customers are increasingly using plans for a wide variety of purposes including securing their own retirement finances while also gifting money to family to help them on to the property ladder.

“Today’s modern equity release plans enable people to manage their borrowing in a flexible way and therefore to meet both needs and wants as their circumstances change through later life.”

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