Retired homeowners have gained more than £7,900 each in property wealth in the past year despite uncertainty in the housing market, analysis from over-55s financial specialist Key Retirement shows.
Key’s Pensioner Property Equity Index found total property wealth owned by over-65s who have paid off their mortgages is near a record high of more than £1.101 trillion after growing by £37bn in the past year.
Dean Mirfin, chief product officer at Key Retirement said: “The long-term strength of the housing market is delivering for retired homeowners who have made around £7,900 in the past year.
“Total property wealth of more than £1 trillion means pensioners who have paid off mortgages can rely on using their homes to generate tax-free returns no matter what happens in the short and medium term.
“The average homeowner is releasing through equity release the equivalent of the gains made since 2010 and property wealth is having a dramatic effect on the standards of retirement living for many thousands across the UK.”
Owning a home outright has been worth nearly £660 a month on average for retired homeowners.
Over-65s in the South East and East Anglia have gained the most, more than £1,000 a month. Meanwhile retired homeowners in the West Midlands have made £960 a month.
Since 2010 retired homeowners have seen growth of 41% or £321bn which is worth around £68,500 on average for every over-65 homeowner.
The strength of the housing market means property wealth is making a major contribution to retirement standards of living, as the equity release market expands.
Customers are releasing an average £77,380 of property wealth, with nearly £134,000 in London and £91,000 in the South East.
The only area to see a drop is London but homeowners in the city still own £176.38bn of property wealth.
Over-65s in the North West are most likely to own outright with 671,000 having paid off mortgages compared with 656,000 in the South East. Over-65s can bank on £1.1 trillion of property wealth.