Pensioners have earned £7,000 a year from their homes, new analysis by Key Retirement has shown. According to the findings, the average over-65 homeowner in the UK has witnessed property wealth gains worth £159,000 – equal to £7,000 per year in the 23 years they have owned their home.
The biggest winners have been over-65s residing in London, with house prices rising by £394,944 over the 27 years they have on average owned their homes – equivalent to £14,257 a year.
Elsewhere, over-65 homeowners in the South East (who have owned their home for an average of 21 years) are more than £230,000 better off from purchasing a property, while over-65s in East Anglia (who have owned their home for an average of 18 years) have seen gains of £206,000 during the average time they have owned their present home.
Across the country, though, strong gains have been recorded – highlighting the long-term investment success of home ownership and the increasing importance of calling on property wealth for retirement planning. According to Key’s Pensioner Property Equity Index, over-65s who have paid off their mortgage now own total property wealth of £1.09 trillion – nearly a record high.
“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,” Dean Mirfin, chief product officer at Key Retirement, said.
“Property wealth of more than £1 trillion enables pensioners who have paid off mortgages to generate returns which are making a huge contribution to their standard of living in retirement. They are also helping family and friends with 26% of equity release customers saying they used some of the proceeds as financial gifts.”
He said this is leading to rapid growth of the equity release market and emphasises why thousands are using their property wealth to transform their own and their families’ finances.