Retired Homeowners Property Wealth Bounces Back

Retirees have experienced a property wealth increase of thousands in the past 12 months.

An analysis of the UK’s leading independent equity release adviser, Key’s data revealed that older homeowners have enjoyed an increase of more than £3,150 in the past year.

According to Key’s Pensioner Property Equity Index, the over-65s cohort total property wealth, who have paid off their mortgage, is valued at £1.133tn which has rose by £14.78bn in the past year.

The statistics reveal a bounce back of the total value of pensioner property in the autumn of 2019 to £1.132tn after key data showed a figure of £1.096tn in early 2019.

Since Autumn 2019, senior homeowners have gained modestly but have still seen solid year-on-year increases.

Key have been analysing property wealth of over-65s, who were mortgage free, for a decade and have seen that the cohort has enjoyed a growth of 45% to a total of nearly £354bn – which has resulted in retirees gaining £75,000 in the past 10 years.

Over the year, retired homeowners in Wales have seen the highest gain of £11,700, and other regions had done better than average with the West Midlands experiencing £8,165, East Midlands (£5,799) and the North West (£4,355).

But East Anglia came off worse as it suffered the biggest decrease where homeowners endured a £3,267 drop in the price of their property.

Homeowners in the South East only suffered a slight price drop (£149 over the year), while the South East owns nearly a fifth (18.9%) of the total property wealth of retired homeowners.

Data revealed that East Anglia is fourth from the top in terms of mortgage-free property wealth held by the over-65s.

Will Hale, Chief Executive at Key, said:

“Political and economic uncertainty hit the housing market last year but there were genuine signs of recovery towards the end of last year and retired homeowners who no longer have mortgages were big beneficiaries.

“Interestingly it was the over-65s in Wales who made the biggest gains – seeing the value of their property increase by nearly £1,000 a month – while those in East Anglia and the South East saw modest falls.

“While it is useful to be aware of market fluctuations what happens on a monthly basis is unlikely to alter the simple fact that millions of over-65s retain considerable property wealth which can transform their standard of living in retirement and enable them to address a wide range of financial issues.

“Increasingly, we are seeing people choosing to access property wealth in retirement and using modern lending features to suit their individual circumstances.

“Choosing to use drawdown rather than lump sum and to repay the interest rather than letting it roll up make these products even more flexible and attractive than before.”

As property wealth has increased for the older generation, the majority of older people are turning their attention to later life planning by opting for an equity release mortgage to fund their retirement.

According to new research from Standard Life and Age Partnership, 80% of over 55s chose an equity release product in order to remain in their much-loved home and not downsize.

The surge in equity release has meant that the lifetime mortgages market has gone from strength to strength so that retirees can enjoy a much more comfortable retirement.

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