Despite ongoing housing market uncertainty caused by Brexit, retired homeowners have seen their property wealth increase by an average of more than £1,000 over the past year.
Over-65s currently own property wealth worth £1.096 trillion, according to equity release adviser Key’s latest Pensioner Property Index, although this is a fall from the £1.118 trillion recorded in February this year.
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The Pensioner Property Equity Index tracks the amount of equity held in property by people over 65 years old in Great Britain. Figures are based on analysis of data from the Office for National Statistics, the UK House Price Index, registers of Scotland House Price Statistics and Key’s UK Equity Release Market Monitor.
London and the South East see property wealth slip
Not all homeowners have benefited from a rise in property wealth over the past year. Retired mortgage-free homeowners in London have seen the value of their property wealth fall by an average of £12,144, equivalent to more than £1,000 a month. Over-65s in the South East and East Anglia also seen their property wealth shrink in the past 12 months, by an average of £4,982 and £1,278 respectively. Homeowners in Scotland have also seen a fall in their property wealth over the year, although by a much smaller average of £247.
Despite these falls, London and the South East still account for more than a third (34%) of all property wealth held by retired homeowners. There are 656,000 over-65s in the South East who have paid off their mortgages and own their homes outright, compared to 671,000 in the North West.
Will Hale, chief executive at Key Equity Release 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.”
West Midlands are the biggest winners
In contrast, over-65s living in the West Midlands have seen their property wealth grow by an average of £7,500 over the past year. Retired homeowners in Wales and the North West have also seen strong gains, with average growth of £6,560 and £6,297 respectively.
“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,” said Mr Hale.
“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.”
Remember that equity release is a major decision and should only be considered after seeking expert equity release advice.