PENSIONERS PROPERTY WORTH £752.72 BILLION

Scotland, Wales and the South West suffer major falls in equity, Key Retirement Solutions Pensioners Property Index shows.

Where preserving pensioners property assets is less important than increasing spendable income, equity release comes into its’ own.     It is a choice which many people fail to make, leaving themselves and their families at very substantial disadvantage   According to Key Retirement Solutions:

Retired homeowners have total property wealth owned outright of £752.72 billion, new research* from leading independent equity release adviser Key Retirement Solutions shows.

But a growing regional divide is emerging with pensioners in Scotland, Wales and the South West suffering major falls, Key Retirement Solutions’ Pensioner Property Equity Index found. There were still winners with over-65 homeowners in the North West, the East, the West Midlands and Yorkshire & Humberside seeing increases.

Across the country homeowners aged 65-plus lost a total of £3.64 billion in the past three months – equivalent to around £787 each – as housing market volatility continued, Key Retirement Solutions’ Pensioner Property Equity Index shows.

But the national figure masked major differences across the country with the average over-65 homeowner in Scotland losing £6,399 in the past three months while in Wales they were £2,062 worse off and £2,063 down in the South West.

Over-65 homeowners in London suffered a £1,210 drop but have still seen average gains of around £20,000 in the past year.

The biggest winners were pensioners in the West Midlands who gained £980 in the three months while over-65s in the East of England were £636 ahead. In Yorkshire & Humberside property equity increased £421 and it rose £495 in the North West.

Key Retirement’s figures show 34% of pensioner property equity is owned by over-65s in London and the South East   – in London over-65s own property without any mortgages worth £132.27 billion while in the South East pensioners own £123.927 billion of property without mortgages.

Dean Mirfin, Group Director at Key Retirement Solutions (www.keyrs.co.uk), said: “The housing market remains volatile with areas such as Scotland, the South West and Wales seeing major swings. Even London has seen a drop after racing ahead throughout most of 2012.

“However there are still bright spots with four regions seeing gains and the essential fact remains that pensioners are literally sitting on a major asset.

“Whatever the trend in the housing market, even for those regions experiencing falls, over-65s own considerable property wealth which represents a massive investment success as they no longer have mortgages on homes they may have bought more than 25 years ago.

“The equity release market is seeing strong growth in the number of plans sold and the money released as more pensioners opt for drawdown products. They enable customers to benefit from lower borrowing costs today, allowing for increased flexibility to access further funds over time as and when required.”

The table below shows the 11 areas of Great Britain monitored by Key Retirement Solutions’ index with four seeing gains.


Region
Average change in value of home equity for homeowners aged 65+ (between September index and January index) Combined change in value of home equity for homeowners aged 65+ (between September index and January index)
London -£1,210 -£441.4 million
South East -£255 -£150.45 million
South West -£2,063 -£1.357 billion
North West +£495 +£338.68 million
East +£636 +£274.75 million
East Midlands -£33 -£14.3 million
West Midlands +£980 +£44.71 million
Scotland -£6,399 -£1.87 billion
Yorks/Humbs +£421 +£41.02
Wales -£2,062 -£562.92 million
North East -£859 -£238.11 million
GREAT BRITAIN -£787 -£3.64 billion

The table below shows over-65 homeowners in the North West are most likely to own their home outright – Key Retirement’s analysis shows 684,200 own their homes without mortgages compared with 657,800 in the South West.

 Pensioners property.

However higher property prices in the South East and London means over-65 homeowners there have more property wealth.

 

 


Region
Estimated property equity in homes owned outright by people aged 65+ (end December 2012 Estimated percentage of total value of property equity belonging to people aged 65+ (end December 2012) Number of households in the region owned outright by people aged 65+
London £132.27 billion 17.57% 364,800
South East £123.927 billion 16.46% 590,000
South West £112.327 billion 14.92% 657,800
East £75.86 billion 10.08% 432,000
North West £75.76 billion 10.06% 684,200
East Midlands £53.2 billion 7.07% 433,400
West Midlands £44.71 billion 5.94% 345,600
Scotland £44.43 billion 5.91% 292,800
Yorks/Humbs £31.52 billion 4.19% 271,700
Wales £31.45 billion 4.18% 273,000
North East £27.25 billion 3.62% 277,200
GREAT BRITAIN £752.72 billion   4,622,500