According to the analysis, total property wealth owned by over 65s who have paid off their mortgages is now worth £1.054 trillion, with average retired homeowners making £29,010 in the year to May. More than £127 billion has been added to the property wealth of the UK’s homeowners aged over 65 in the past year despite the recent slowdown in the housing market.
The long-term success story of property ownership is underlined by Key’s index. Since the group started analysing over 65s housing wealth in 2010 retired homeowners have seen growth of 35%, or £274 billion. Owning a home has been worth around £62,000 over the past seven-and-a-half years.
Key’s Pensioner Property Equity Index shows only over 65s in London and Scotland saw the value of their total property wealth drop in the past year. However, retired London homeowners still own £172.65 billion of property wealth.
Retired homeowners in East Anglia saw the biggest growth in the past year, and are now £56,138 better off - the equivalent of nearly £4,700 a month. Over 65s in the South East and South West saw gains of more than £40,000 each, while retired homeowners in the West Midlands made nearly £40,000.
The long-term financial benefits of owning a house is underlined by average equity release payouts of £73,610, and as much as £117,000 in London. However Key’s index shows property prices across all the regions monitored have fallen in the past three months.
Dean Mirfin, Technical Director at Key Retirement said: “Owning a house has been a major investment success for retired homeowners and the average gain of £29,000 demonstrates the contribution property wealth can make to retirement planning.
Pensioners who have paid off mortgages have been able to rely on consistent tax-free returns from their homes, no matter what the impact of historically low interest rates and market uncertainty has been. Whatever happens in the property market homeowners will always have a major asset that can make a major contribution to their retirement standard of living whether it is generating extra income or capital to help loved ones.”
