The broker noted that older borrowers were now taking out the gains in value that their properties had seen since the turn of the decade.
It states that average equity release customers around the country have cashed in £70,625 of property wealth, with nearly £114,000 in London and £82,000 in the South East
Dean Mirfin, chief product officer at Key Retirement, said: “The strength of the housing market over the three months has significantly boosted property wealth for pensioners making as much as £3,500 a month.
“Prices may not continue to grow as fast but pensioners who have paid off mortgages can still rely on tax-free returns no matter what happens in the short and medium term.
“The average homeowner is releasing through equity release the equivalent of the gains made since 2010 and property wealth is having a dramatic effect on the standards of retirement living for many thousands across the UK.”
The value of property investment is underlined by Key Retirement’s Pensioner Property Equity Index, which tracks the amount of equity held in property by people over 65 years old in Great Britain. Figures are based on analysis of data from the ONS Family Spending Report (2014), the UK House Price Index, Registers of Scotland House Price Statistics and ICM (2014) and Key Retirement’s UK Equity Release Market Monitor.
£47bn property wealth increase
This index indicates that more than £47.2bn has been added to the property wealth of the UK’s over-65 homeowners over the three months as the property market recovered across all regions. Total property wealth owned by over-65s who have paid off their mortgages grew to a record £1.101trn in August.
Since Key Retirement started analysing over-65s housing wealth in 2010 retired homeowners have seen growth of 41% or £321bn, which is worth around £68,500 on average for every over-65 homeowner. Owning a home has been delivering theoretical gains of around £9,800 a year for over-65s.
Key’s Pensioner Property Equity Index shows the biggest individual gains were in London where over-65s in London made nearly £17,000 each from their properties but pensioners in East Anglia, Scotland, the South West and the North East also saw double-digit gains.