Older homeowners’ property wealth rises by £17,000 in a year
The total property wealth of older homeowners stands at £3.02trn, according to Key Later Life Finance research.
Older homeowners in London have experienced the greatest individual gain at £23,974, which is an average of nearly £2,000 a month for the past year.
The South East and South West had the biggest collective gains in total property wealth of older homeowners at £30.2bn and £23.2bn respectively.
Scotland recorded the smallest gain, but homeowners were still £2,230 better off over the year.
Key said that the average £16,658 gain in housing wealth since last year was equal to 32 weeks of income for the average pensioner couple or a year and 17 weeks of income for a single pensioner.
If homeowners chose to release cash from the typical equity release LTV, it could equate to £93,511, a rise of £8,000 over a year.
‘Strong housing market important for the economy’
Will Hale, CEO at Key, said that there was “no doubt” that house prices had started to fall in 2023 but the gains made by homeowners at the start of 2022 meant that they were still £16,000 better off than at the start of 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,” he added.
Hale added that retirees’ spending patterns mean they use a “disproportionate amount” of their fixed income to cover utilities, groceries and other basics, so “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,” he said.
Hale said that accessing the £3.02trn worth of equity tied up in their homes can help with short- 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 mortgage 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,” he added.