Over 65s' housing wealth surpasses £3 trillion

Over-65s have seen their property wealth increase by nearly £1,400 a month in the past year despite recent falls, new analysis from Key Later Life Finance shows.

The total property wealth owned outright by over-65s has increased by £167.016 billion, worth an average £16,658 for each homeowner who has paid off their mortgage over the last twelve months.

Their total property wealth now stands at £3.02 trillion with older homeowners in all parts of Great Britain benefiting. Older homeowners in London have seen the biggest individual gains at £23,974 – an average of nearly £2,000 a month for the past year.

The South East and South West regions saw the biggest total collective gains at £30.2 billion and £23.2 billion, respectively. Scotland saw the smallest individual gains, but homeowners are still £2,230 better off.

When put into context, the average £16,658 gain in housing wealth since January 2022 equates to just over 32 weeks income for the average pensioner couple (£515) or a year and 17 weeks of income for a single pensioner (£239).

Should the homeowner choose to release the typical equity release LTV, this could equated to £93,511, an increase of £8,000 over twelve months.

Will Hale, CEO at Key, said: “While there is no doubt that we have started to see prices falling in 2023, the gains homeowners saw in early 2022 still mean that they are over £16,000 better off than in January last year. A strong housing market is important for the economy, and we are starting to see some green shoots with mortgage approvals rising but that said inflation rather than house prices are likely to be older homeowners’ biggest source of concern.

“Retirees spending patterns mean that they use a disproportionate amount of their often fixed income to cover utilities, groceries and other basics so the 9.2% rate of income hits them particularly hard. While the recent state pension increases will no doubt be welcome, more older people than ever are having to make hard choices around their finances.

“Accessing the £3.02 trillion worth of equity tied up in their homes can help with both short-term and longer-term needs. Whether it is boosting income, repaying borrowing, supporting family or making your home more energy efficient, people need to realise they have flexible products to consider. Lifetime mortgages are no longer necessarily for a lifetime and with a host of safeguards as well as options to choose from, customers have more choice at a time when they most need it.”