Pensioner property wealth hits record high of £807bn

Independent advice is crucial when considering how best to use property wealth to improve retirement income when either downsizing or releasing equity, Dean Mirfin has said.

The director of Key Retirement Solutions said: “Pensioner property wealth is at a new record high of £807bn as the housing market continues to grow.

“Given there are average gains of more than £1346 in just three months, this highlights that property wealth should be a major part of retirement income planning.”

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Mr Mirfin said that growth of outright-owned property wealth has helped drive the equity release market, as figures in the research showed that £339.8m was released in the first three months of this year, with the average customer taking more than £61,230 from their home.

According to KRS research, retired homeowners have seen their property wealth grow by more than £6.3bn in the past three months as the housing market continues to grow.

The research revealed that more than 36.7 per cent of pensioner property equity is owned by over-65s in London and the South East, with retired homeowners in London gaining nearly £10,700 each in the past three months.

More than 70 per cent of pensioner property wealth was concentrated in London, the South East, South West, the East and North West. In London, people aged 65 and over owned property without any mortgages worth £151.7bn while, in the South East, pensioners owned £145bn of property outright.

Mr Mirfin added: “Even homeowners in areas where prices have fallen still have considerable property wealth, considering they own their homes outright and will have seen strong gains.”

Table: House Price Winners and Losers

Quarterly Winners

Quarterly Losers:

East England: £4290 gained

South West: £2283 gained

Wales: £5000 fall

Scotland: £3900 loss

North west: £966 loss

Source: KRS

Adviser View

Ian Brown, director of Swansea-based Cosgrove Brown Financial Planning, said: “As a result of having addtional value in their properties, pensioners are turning to equity release as a potential way to give them a more comfortable lifestyle in retirement.

“The quality of the products, such as no negative equity guarantee, has also helped make equity release an attractive option and given people more confidence.”