Retired homeowners get £3.8billion house price windfall
04-04-2015
By Western Morning News
House price rises mean South West pensioners are now sitting on property equity of £117billion
Retired homeowners in the South West have seen their property wealth grow by £3.8billion to £117.194billion in the past six months thanks to rising house prices, official figures show.
A £33billion national increase means the value of UK property owned outright by over-65s is now £861.188billion – an all-time high.
The rising housing market has earned the average pensioner £7,117 - nearly £1,200 a month nationally - and £6,152, or £1,025 a month - on average across the six county region since August.
Since January 2010, total pensioner property wealth has increased by £81.27 billion – the equivalent of £17,323 each, according to the Pensioner Equity Index, by equity release firm, Key Retirement.
The company released a record high of £1.38 billion in equity last year with the average customer taking around £64,800 from their home.
Richard Copus, spokesman for the National Association of Estate Agents in the South West, said cashing some on the value of property without selling up, to fund holidays or overseas homes, was likely to grow.
"The population is getting older and may retiring over the next few years will be doing so with reasonable final salary pensions,” he added.
“In many cases their children will be in their 30s or 40s with their own homes, children and good jobs.
“Now they are sitting on this equity, releasing that could become quite a big thing over the next few years.”
In the South West, 626,600 homes are owned outright by the over-65s, according to analysis of data from the Office for National Statistics (ONS) Family Spending Report (2014).
Turn £10 into £40 with one click
Turn £10 into £40 with one click
Transform your tenner into a massive £40 with just one click at Sun Bingo. Deposit £10 today and we’ll give you an extra £30 to play with. Let the fun begin.*T&Cs apply. 18+. Wager Regs. Gamleaware.co.uk
AdyoulikePromoted by Sun Bingo
This sector accounts for 13.61% of the market and is worth £117.194billion.
House prices in the South West dropped -0.4% last month, accordin got eh trusted Land Registry market survey to February 2015, with an annual rise of 5.1% taking the average price to £186,124.
In London, soaring price rises of at least 13% over the past year have left 366,00 pensioners sitting on £167.731billion, 19.48% of the total market.
Nearly two-thirds of pensioner property wealth is concentrated in London, the South East, the South West and East Anglia.
Retired homeowners in London were the biggest winners gaining an average of more than £20,675 each in the past six months, while homeowners in the South East are more than £14,123 better off and pensioners in East Anglia are £13,105 better off.
In the five years since Key started monitoring the housing wealth of the over-65s, in January 2010, total pensioner property wealth has increased by £81.27 billion – the equivalent of £17,323 each.
The growth in property prices is helping to drive the equity release market and Key’s figures show a record high of £1.38 billion was released last year with the average customer taking around £64,800 from their home.
Dean Mirfin, group director at Key, said pensioners have “huge assets in their houses”.
“In the past five years they’ve made an average of more than £17,000 each from their homes, which is an impressive return with interest rates at historic lows,” he added.
“Even if or when the property market cools they will still have a major asset.
“With equity release rates at their lowest in ten years and the long term trend for rates continuing to go down, we expect the market to continue to expand.”