According to theresearch the nation’s 6.3 million retired homeowners have gained on average around £16,265 each in property wealth over the past twelve months. The total equity tied up in homes owned by over 65s has now hit £1.2 trillion for the first time.
Economic Lifestyle says that retired homeowners have benefited substantially from the strong performance of the property market over the past twelve months. However, with the average annual disposable income of a single pensioner in the region of only £12,000*, the company warns that many ‘equity rich’ retired homeowners may actually feel less well off as the cost of living rises faster in Britain than in any other major economy in the world**.
Mark Neal, managing director of Economic Lifestyle, said: “As most pensioners have either paid off their mortgage or are very close to doing so, over 65s are reaping huge benefits from the UK property boom.
“Unfortunately equity gains don’t tell the whole story. Huge numbers of older people need to boost their retirement income as they just don’t earn enough through their pensions to make ends meet.
“Your home can therefore become a lifeline as more options are now available if you want to take advantage of the equity gains you’ve seen. More and more over 65s are considering their options, be it downsizing, an equity release scheme or moving into a property that is more appropriate to their needs.”
According to Economic Lifestyle’s Pensioners Property Equity Index, retired homeowners across Britain are better off than they were last year, but the largest year-on-year increases were in London and East Anglia – the only regions where retired homeowners saw the value of their properties appreciate by on average over £20,000 each. The collective property equity held by pensioners in the capital is now a staggering £223.15 billion.
However property-owning pensioners in the North East saw the smallest gains as the value of their homes rose by on average around £3,647 during 2006 – over £12,600 less than the national average increase. Economic Lifestyle says this is primarily due to the region’s relatively stagnant property market.
