According to the latest figures released by Key, total property wealth owned by over-65s who have paid off mortgages is valued at £1.133 trillion and has increased by £14.78 billion in the past year which equates to a gain of £3,152 for average retired homeowners.
The data revealed that the total value of pensioner property fell to £1.096 trillion in the early part of last year before recovering in the autumn to £1.132 trillion. Gains since the autumn have been modest but retired homeowners have still seen strong year-on-year increases.
The long-term gains have been even more impressive. Since Key started analysing the mortgage-free property wealth of the over-65s in 2010 retired homeowners have benefited from growth of 45% - a total of nearly £354 billion - earning them gains of £75,000 in the past 10 years.
The biggest winners in the past year are over-65s in Wales who have seen gains of £11,700 while retired homeowners in the West Midlands (£8,165), East Midlands (£5,799) and the North West (£4,355) have also done better than average.
The only region to suffer substantial falls was East Anglia where retired homeowners are £3,267 worse off over the year. Homeowners in the South East saw marginal price falls of £149 over the year.
The South-East still accounts for nearly a fifth (18.9%) of all property wealth held by retired homeowners despite the slight drop while East Anglia is the fourth-wealthiest region in terms of mortgage-free property held by over-65s.
Will Hale, CEO at Key, said: “Political and economic uncertainty hit the housing market last year but there were genuine signs of recovery towards the end of last year and retired homeowners who no longer have mortgages were big beneficiaries.
“Interestingly it was the over-65s in Wales who made the biggest gains – seeing the value of their property increase by nearly £1,000 a month – while those in East Anglia and the South East saw modest falls. While it is useful to be aware of market fluctuations what happens on a monthly basis is unlikely to alter the simple fact that millions of over-65s retain considerable property wealth which can transform their standard of living in retirement and enable them to address a wide range of financial issues.
“Increasingly, we are seeing people choosing to access property wealth in retirement and using modern lending features to suit their individual circumstances. Choosing to use drawdown rather than a lump sum and to repay the interest rather than letting it roll up make these products even more flexible and attractive than before.”