New data suggests, unsurprisingly, that older homeowners are winners, when it comes to the property market with retired homeowners, have typically seen their property’s value grow by £159,000 in value or £7,000 per year on average, according to research from Key Retirement. In Rushey Mead, Leicester, a property purchased in 1980 on Dalkeith Road for a mere £19’000 is on the market for a staggering £179’000, exactly £160’000 more than the purchase price.
Key Retirement’s Pensioner Property Index revealed that over-65s own property wealth worth an estimated £1.09trillion and have owned their home for an average of 23 years with all areas of the country having recorded strong gains underlining the long-term investment success of home ownership and the growing importance of property wealth for retirement planning, the report noted.
Unsurprisingly however, those in London and the South East have seen the greatest gains in the value of their properties over their ownership period. Alongside this, it must be noted that a lot of the pensioners surveyed in the data purchased their homes around the early to mid 80’s – no awards for concluding that property prices were significantly lower before this generation of homebuyers.
Over-65s in London have been the biggest winners with property prices soaring by £394,944 over the 27 years they have on average owned their homes – equivalent to £14,257 a year though property prices in London are now falling so this sum is set to decrease. Those in the South East have typically owned their homes 21 years and witnessed price rises of more than £230,000.
In contrast, retirees in the North East have typically owned their home for 25 years and see prices rise by around £77,000 – an average of just over £3,000 per year; this is filtering through to the equity release market with customers using it to support their retirement living standard releasing an average £77,380 of property wealth nationally and nearly £134,000 in London and £91,000 in the South East.
Key Retirement chief product officer Dean Mirfin said: The long-term strength of the housing market is demonstrated by the fact that on average over-65s are making nearly £7,000 annually from their homes rising to more than £14,000 a year in London. Property wealth of more than £1trillion enables pensioners who have paid off mortgages to generate returns which are making a huge contribution to their standard of living in retirement.”
He adds; “They are also helping family and friends with 26% of equity release customers saying they used some of the proceeds as financial gifts.”