Since Key started analysing the mortgage-free property wealth of the over-65s in 2010, homeowners have seen growth of 58% – a total of more than £452bn – which is equivalent to £90,420 per household in the past 11 years.
While pensioner property wealth has increased significantly, over-65s have not seen the same boost to their incomes, with the average pensioner income only rising £12 to £331 per week over the last 11 years.
Under-75s have average weekly incomes of £370 after housing costs, compared with £302 for over-75s.
Key’s Pensioner Property Equity Index found that the total property wealth owned by over-65s who have paid off their mortgages is valued at £1.232trn, having increased by £8.436bn over the past three months.
That equates to an average gain of £1,685 for every homeowner aged over 65 – around £561 a month – with people in East Anglia and Wales seeing gains of £10,000 and £8,300, respectively.
The only region to see property values drop in the past three months was the South West, where average prices are around £738 lower in the past three months.
The South East accounts for a fifth of all property wealth held by the over-65s, with the South West and East Anglia accounting for nearly 29%.
More over-65s in the South East have paid off their mortgages, with 727,000 owning their homes outright compared with 666,614 in the South West and 549,784 in East Anglia.
London has the second lowest number of over-65s owning homes outright at 259,801 ahead of the North East on 233,601.
Will Hale, chief executive at Key said: “Over the last three-months, the property market has been buoyant – spurred on by the extension of the stamp duty holiday and the launch of government guarantees for over 95% LTV mortgages.
“That said, the market performance over the last eleven years has generally been positive and over-65s homeowners seen their property wealth increase by an average of £90,420 over the period.
“This puts into stark contrast the increase in average weekly pension income which jumped just £12 between 2010 and 2020.
“The retirement ambitions and needs of today’s over-65s as well as inflation make this increase seem even smaller and highlights how important it is for people to consider all their assets at retirement.
“Sitting in a quarter of a million pound home unable to keep the heating on or meet other day-to-day living costs makes no sense.
“Today’s modern equity release products can help people access some of the value tied up in their properties to address these issues and then through flexible features enable them to manage their borrowing by choosing to make ad hoc capital repayments or to service the interest if they wish.”
