Retired homeowners earning more from their homes

Posted on Wednesday, July 3, 2019

New research from equity release adviser, Key, has revealed that despite continued market uncertainty, in the past year, retired homeowners saw their property wealth increase by more than £1,000.

According to the data, the total property wealth owned by over-65s who have paid off mortgages is now valued at £1.096 trillion – this is a fall from the £1,118 trillion recorded in February. However on an annual basis retired homeowners still saw an increase of £5.445 billion.

Since Key started analysing the mortgage-free property wealth of the over-65s in 2010 retired homeowners have benefited from growth of 41% - a total of more than £316 billion - earning them gains of £67,000 in almost a decade. Across Great Britain average gains for the over-65s in property wealth in the past year are equivalent to £1,160 each but the national average does not tell the whole story.

The biggest winners are over-65s in the West Midlands who are nearly £7,500 better off than a year ago with retired homeowners in Wales (£6,560) and the North West (£6,297) also recording strong gains in the past 12 months.

Retired mortgage-free homeowners in London, however, have lost more than £1,000 a month in the past year while over-65s in the South East and East Anglia have also seen property wealth values drop. Scottish retired homeowners saw property wealth slip slightly.

London and the South East still account for more than a third (34%) of all property wealth held by retired homeowners despite the recent falls.

Will Hale, CEO at Key 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. Speaking to a specialist adviser is key to making smart choices.”


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