Massive leap in equity held by older home-owners

Over-65s saw their property wealth increase by £800 a month recently thanks to frenzied demand during the stamp duty holiday, an equity release firm claims. 

Over the past six months property owned outright by over-65s increased in value by £24.225 billion which is an average £4,833 for each older homeowner.

Their total property wealth now stands at £1.256 trillion with all parts of Britain benefiting apart from London where property values fell as people looked to leave and central London house prices underperformed. 

The biggest gains in the past six months were in Scotland and the South East with over-65s gaining over £13,000 and nearly £12,000 respectively.

The figures come from equity release firm Key, based on studies of official government data for house prices and ownership. 

Key says that since it started analysing the mortgage-free property wealth of the over-65s back in 2010, homeowners have seen growth of 61 per cent - that’s a total of more than £476 billion which is equivalent to around £95,000 per household over the past 11 years.

The only region to see property values drop in the past six months was London where average prices are around £6,647 lower. All other regions saw growth of at least nearly £1,000.  

More than a fifth of all property wealth held by over-65s is in the South East with the South West and East Anglia the next biggest regions for over-65s property wealth.

Will Hale, chief executive at Key, says: “The 61 per cent rise in the property wealth of over-65s over the past 11 years dwarfs single digit increases in average pensioner incomes over that period and underlines the case for advisers and customers considering all assets when looking at financial planning at and through retirement.

“Equity release customers are increasingly using plans for a wide variety of purposes including securing their own retirement finances while also gifting money to family to help them on to the property ladder. Today’s modern equity release plans enable people to manage their borrowing in a flexible way and therefore to meet both needs and wants as their circumstances change through later life.”