FEBRUARY 22, 2019 | BY A & S Property
Property still beats a pension, new figures show

When it comes to saving for retirement, many of us are split on whether property or a pension is the best way to invest, but while both have their merits, new figures from Key (formerly Key Retirement) would suggest that property almost certainly remains a better option.

Fresh analysis from the independent equity release adviser shows that mortgage free retired homeowners saw their homes increase by almost £1,000 a month over the past six months despite housing market uncertainty.

Total property wealth owned by over-65s who are mortgage free is at a new record high of £1.118trn with the average homeowners seeing the value of their homes increase by £28bn.

Across Great Britain, average gains for the over 65s in property wealth are worth £5,998 each with all areas of the country benefiting in the past six months. 

Homeowners in Yorkshire and Humberside (+£8,607) have seen the biggest increases followed by those in Wales (+£7,875) and the North West (+£7,546) have also done better than average (+£5,889).

Retired, mortgage free homeowners in London (+£1,655) have the least to celebrate and have only just matched over six months the same amount over-65s in Yorkshire & Humberside have achieved in a month (+£1,435). 

Since Key started analysing the un-mortgaged property wealth of the over-65s in 2010 retired homeowners have seen growth of nearly £340bn in property wealth – equivalent to an increase of 43%.

Will Hale, CEO at Key, commented: “Retired homeowners who have paid off their mortgage have made on average nearly £1,000 from their homes per month with over-65s in some parts of the country experiencing even bigger gains.  Those in Yorkshire and Humberside have seen the biggest increases while those in London have seen more modest gains.

“The numbers are fascinating but the basic fact is that no matter what happens year to year to house prices many over-65s will have considerable property wealth which can transform their standard of living in retirement and help family members. 

“Increasingly equity release customers are able to make substantial gifts to family members including their adult children or even grandchildren with money being used to clear debts, fund university fees and pay for house deposits and weddings. Customers can also use the money to ‘age-proof’ their own homes and preserve wealth for the family.

“While equity release is not right for everyone, it is clear that if your home is your largest asset in retirement, you should take some time to think through when and if you might need to access this wealth. Speaking to a specialist adviser is key to making smart choices.”

The table below shows the detailed picture across Great Britain with all areas seeing growth.

 

Region

Average change in value of home equity for homeowners aged 65+ (past six months)

Combined change in value of home equity for homeowners aged 65+ (past six months)

South East

Up £6,103

+£4.003 billion

London

Up £1,655

+£609.39 million

South West

Up £6,328

+£2.003 billion

North West

Up £7,546

+£5.063 billion

East Anglia

Up £3,133

+£1.478 billion

East Midlands

Up £7,527

+£3.129 billion

West Midlands

Up £7,376

+£2.643 billion

Yorks/Humbs

Up £8,607

+£2.483 billion

Scotland

Up £5,499

+£1.550 billion

Wales

Up £7,875

+£2.083 billion

North East

Up £4,103

+£1.128 billion

GREAT BRITAIN

Up £5,998

+£28.139 billion

The table below shows over-65s in the North West are most likely to own outright with 671,000 having paid off mortgages compared with 656,000 in the South East. However nearly a fifth of all property wealth held by retired homeowners is in the South East.

 

Region

Estimated property equity in homes owned outright by people aged 65+

Estimated percentage of total value of property equity belonging to people aged 65+

Number of households in the region owned outright by people aged 65+

South East

£214.370 billion

19.16%

656,000

London

£173.340 billion

15.49%

366,000

South West

£160.514 billion

14.35%

626,600

East Anglia

£139.026billion

12.42%

472,000

North West

£110.719 billion

9.89%

671,000

East Midlands

£82.787 billion

7.40%

431,200

West Midlands

£70.272 billion

6.28%

358,400

Yorks/Humbs

£47.289 billion

4.23%

288,600

Scotland

£42.725 billion

3.82%

282,000

Wales

£42.567 billion

3.80%

264,600

North East

£35.333 billion

3.16%

275,000

GREAT BRITAIN

£1.118 trillion

 

4,691,400

 


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