Older homeowners see property values soar £159,000
Retired homeowners have typically seen their properties grow by £159,000 in value or £7,000 per year on average, according to research from Key Retirement.
The broker’s pensioner property index revealed that over-65s own property wealth worth an estimated £1.09trn and have owned their home for an average of 23 years.
All areas of the country have recorded strong gains underlining the long-term investment success of home ownership and the growing importance of property wealth for retirement planning, the report noted.
Unsurprisingly however, those in London and the South East have seen the greatest gains in the value of their properties over their ownership period.
Over-65s in London have been the biggest winners with property prices soaring by £394,944 over the 27 years they have on average owned their homes – equivalent to £14,257 a year. Those in the South East have typically owned their homes 21 years and witnessed price rises of more than £230,000.
In contrast, retirees in the North East have typically owned their home for 25 years and see prices rise by around £77,000 – an average of just over £3,000 per year.
Equity release to help family
This is filtering through to the equity release market with customers using it to support their retirement living standard releasing an average £77,380 of property wealth nationally and nearly £134,000 in London and £91,000 in the South East.
Key Retirement chief product officer, Dean Mirfin, said: “The long-term strength of the housing market is demonstrated by the fact that on average over-65s are making nearly £7,000 annually from their homes rising to more than £14,000 a year in London.
“Property wealth of more than £1trn enables pensioners who have paid off mortgages to generate returns which are making a huge contribution to their standard of living in retirement.
“They are also helping family and friends with 26% of equity release customers saying they used some of the proceeds as financial gifts,” he added.