Pensioners losing property wealth

Nia Williams

March 30, 2011

This is according to independent equity release adviser Key Retirement Solutions. Its Pensioner Property Equity Index shows that homeowners aged 65-plus lost a collective £18.4 billion in the past three months – equivalent to £4,290 each – as house prices continued to slide.

The biggest losers were over-65 homeowners in Scotland where average losses were £8,720 while retired homeowners in the North East are £7,058 worse off after house price falls.

Only over-65 homeowners in London escaped the property market slide with housing equity virtually unchanged.

Key Retirement’s figures show nearly a third of property equity is owned by pensioners in London and the South East of England – in London over-65s own property without any mortgages worth £124.4 billion while in the South East pensioners own £121 billion of property without mortgages.

Commenting, Dean Mirfin, group director at Key Retirement Solutions, said: “The housing market remains in the doldrums and the average losses of £4,290 this year are on paper a major blow.

“But despite current volatility it is clear the over-65s own considerable property wealth which still represents a massive investment success as they no longer have mortgages and will in most cases have bought more than 25 years ago.

“The equity release market saw a rise in the number of plans sold in 2010 with more pensioners opting for drawdown products which enable them to benefit from lower borrowing costs today, allowing for increased flexibility to access further funds over time as and when required.”

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