Retired property owners quids in despite the slum in the UK real estate market, report shows

Written by Ray Clancy

Friday, 10 December 2010 10:34

Retired property owners in the UK have total real estate wealth owned outright of up to £769.8 billion despite housing market volatility hitting prices in the past three months, new research shows.

However, property owners aged 65 and over lost a collective £5.2 billion in the past three months, equivalent to £832 each, as the continuing squeeze on mortgage availability hit house prices, the Key Retirement Solutions’ Pensioner Property Equity Index shows.

It paints a picture of winners and losers. Retired property owners in the East of England, Scotland and Wales have benefited most. Average over 65 owners in the East of England gained £2,062 in the past three months while Scots pensioners were £2,544 better off and Welsh over 65s made £45.

The biggest losers were over 65 homeowners in London who saw housing equity fall by £2,625 while those in the East Midlands suffered a £2,394 drop.

Over- 5s homeowners have still seen growth in their total property wealth this year. Ehen Key Retirement launched its index in March the over 65s homeowners had total equity of £765.18 billion.

The report also shows that nearly a third of property equity is owned by pensioners in London and the South East of England. In London over 65s own property without any mortgages worth £124.4 billion while in the South East pensioners own £123.8 billion of property without mortgages.

‘It is almost impossible to call the trend in the property market currently with the lack of mortgage availability making it very difficult for buyers,’ said Dean Mirfin, group director at Key Retirement Solutions.

‘However it is clear that the over 65s own considerable property wealth which represents a massive investment success as they no longer have mortgages and will in most cases have bought more than 25 years ago,’ he explained.

‘Their property wealth represents vitally important potential source of income and over 65s can unlock as much as £72,507 on average. This at today’s annuity rates could alternatively produce an annual income for life of £4,725. When pensioner household incomes before tax are around £21,112, that is a 22% increase which could have a dramatic and positive effect on standards of living,’ he added.