Elderly homeowners in Britain have seen their property wealth rise by a staggering £12.5bn during the past three months, according to new research.
Analysis from the retirement pensioner property index from over 55’s financial specialist Key Retirement said that owning a property has made the typical pensioner almost £900 per month during the period.
This means that pensioners who own their own home have gained around £2,680 each from their homes during the past three months. As a result, overall pensioner property wealth has hit a new high.
During the past five years, Key Retirement suggest that the housing wealth of the over 65’s has risen by 12%, or £93.85bn, which equates roughly to £20,000 for each homeowner. In addition, the report suggests that the rise in property prices will lead to swelling of the equity release market, which gives homeowners to release wealth from their houses.
Retired property owners in the capital were the biggest gainers, according to the research. Figures suggest that they have managed to achieve gains of £16,250 during the past three months. Additionally, the figures show that around a fifth of all pensioner property is to be located in London, with a total wealth of £173,683.
Homeowners in Scotland were found to be £8,650 better off, with pensioners in Yorkshire and Humberside seeing an increased wealth of £4,063.
However, pensioner property owners in Wales saw a fall in their housing wealth, with an average loss of £2,230. Falls were also recorded in the North West and in the West Midlands.
Retired homeowners see wealth increase
‘Retired home owners have huge assets in their houses with total property wealth hitting another all-time high of £873 billion highlighting the growing importance of housing for retirement planning,’ noted Dean Mirfin, technical director at Key Retirement. ‘No matter what happens in the property market home owners will always have a major asset which should be considered as part of retirement planning. Innovation in the equity release market and the launch of pension freedoms are opening up more ways for homeowners to use their property wealth,’ he added.
Concluding, Mr Mirfin said, ‘retired home owners, and those approaching retirement, should take advice on how their property wealth can generate additional capital and/or income. Advisers and lenders need to focus on a holistic approach to retirement planning which ensures that property wealth is considered alongside pension savings and other investments.’