On average, over-65s have seen their property wealth increase by more than £10,000 this year, according to research from Key Later Life Finance.
This is despite some recent signs of cooling as the cost-of-living crisis starts to bite. However, so far in 2022 the housing market has continued to boom with strong demand driving prices higher.
So far this year the total property wealth owned outright by over-65s has increased by £101.5 billion to almost £3 trn. This is worth an average £10,121 for each homeowner who has paid off their mortgage.
Total property wealth now stands at £2.95trn with older homeowners in all parts of Great Britain benefiting. The biggest gains per household this year were in London where homeowners are more than £16,000 better off while in the South West average gains are just behind at £15,950.
As a region the South West saw the biggest total gain at £16.7bn ahead of the South East and London on £15.5bn and £15.3bn.
With inflation now hitting more than 10%, over-65s who are retired or are on a fixed income are likely to be feeling the pinch.
However, housing equity can help people to meet this income shortfall and the average gain in housing wealth this year equates to nearly 20 weeks income for the average pensioner household (£511) or 41 weeks for single pensioners (£246).
Will Hale, CEO at Key, said: “In the wake of the pandemic and Stamp Duty Holiday, the housing market has been buoyant as more people looked to get their first foot on the property ladder or move property.
“While there are signs that it is cooling in the face of rising interest rates and the cost-of-living squeeze, older homeowners are likely to have substantial equity tied up in their homes.
“Choosing to use housing equity is a decision which needs to work for over-65s now and in the future, but people should know that there are options available to help them meet increasingly unsustainable utility and food bills if they are living in a substantial asset.
“Those on low to modest or fixed income have been particularly hard hit with the recent price rises and with pension incomes often not keeping pace with inflation, many older customers are really feeling the pinch.
“With equity release rates increasing and uncertainty around property prices, now is a good time for older homeowners to seek specialist advice and consider all their options.
“With the rising cost of living, it is unsurprising that many people are looking across all their assets to see how they can best meet day-to-day living costs. In this context housing equity, and therefore equity release products, has an important role to play in helping older customers manage their finances and achieve their needs and wants in retirement.
“Equity release can be a good option, but it is important that customers and their advisers consider carefully both the short and longer term implications of these products. Feeling under financial pressure can impact on how you make decisions, so it is vital that individual circumstances are thoroughly explored and advice is always highly personalised.”
The table below shows the detailed picture across Great Britain with all areas seeing growth and the South West leading the way with total home equity rising by £16.666bn while Londoners saw the biggest average individual gains at £16,081.
Region | Average change in value of home equity for homeowners aged 65+ in 2022 | Combined change in value of home equity for homeowners aged 65+ in 2022 |
| South West | Up £15,950 | +£16.67 billion |
| South East | Up £10,220 | +£15.51 billion |
| London | Up £16,081 | +£15.26 billion |
| East Anglia | Up £11,945 | + £12.58 billion |
| West Midlands | Up £11,353 | +£10.89 billion |
| Yorks/Humbs | Up £10,310 | + £9.08 billion |
| North West | Up £5,992 | + £7.21 billion |
| East Midlands | Up £8,557 | + £6.94 billion |
| Scotland | Up £4,731 | + £3.83 billion |
| Wales | Up £6,163 | +£2.33 billion |
| North East | Up £2,805 | + £1.17 billion |
| GREAT BRITAIN | Up £10,121 | +£101.48 billion |
The table below shows nearly 37% of all housing wealth owned by over-65s is concentrated in the South East and London even though more older homeowners in East Anglia, the South West, North West, and West Midlands own their homes outright than in London.
Region | Estimated property equity in homes owned outright by people aged 65+ | Estimated % of total value of property equity belonging to people aged 65+ | No. of households in the region owned outright by people aged 65+ |
| South East | £589.51 billion | 19.92% | 1,517,283 |
| London | £499.18 billion | 16.87% | 948,681 |
| East Anglia | £372.51 billion | 12.59% | 1,053,558 |
| South West | £337.95 billion | 11.42% | 1,044,925 |
| North West | £247.73 billion | 8.37% | 1,203,862 |
| West Midlands | £237.10 billion | 8.01% | 959,303 |
| East Midlands | £198.03 billion | 6.69% | 811,414 |
| Yorks/Humbs | £180.40 billion | 6.1% | 880,727 |
| Scotland | £151.89 billion | 5.13% | 810,000 |
| Wales | £80.29 billion | 2.71% | 378,000 |
| North East | £64.30 billion | 2.17% | 418,612 |
| GREAT BRITAIN | £2.96 trillion | 10.026 million |
