Pensioners still hold a vast amount of equity in their property, despite a short-term decline in house prices, according to new research.
The Prudential Equity Release Index – which tracks assets held by those over 65-years-of-age in England and Wales – still have over £726.43 billion of equity in their properties, despite the recent slowdown in the market.
The latest research from Halifax shows an 8.8 per cent drop in prices over the last year.
London and the south-east account for some 40 per cent of the equity held by the demographic – accounting for some 40 per cent of all property.
In London those over 65-years-of-age own as many as 459,988 properties, worth an estimated £163.164 billion - 22.46 per cent of the total.
Similarly, in the south-east retired homeowners possess £146.224 billion worth of property - 20.13 per cent of the total.
“Although most retired homeowners have seen the value of equity in their homes fall in recent months, it’s important that they don’t lose sight of the bigger picture which is that despite current falling property prices, in the vast majority of cases retired homeowners have built up a significant amount of equity in their homes over a number of years,” said Keith Haggart, director of lifetime mortgages, at Prudential.
Older homeowners in the north-east account for the smallest percentage of housing equity, with 161,353 properties owned, worth £20.586 billion, just 2.83 per cent of the total.
However, the north-east is one of only three regions to see the average value of properties held by the over 65s increase in value between February 2008 and May 2008.
The average property has increased by £2,964 in value, along with south-west and London which have both also seen prices increase.
“Together with the rising cost of living means that many more people are now looking to release equity from their homes to maintain or improve their standard of living in retirement,” added Mr Haggart.
“Equity release schemes can be an excellent way to help do this, and any provider who is SHIP registered provides a no-negative equity guarantee as well as guaranteeing that the mortgage interest rate is fixed for the term of the loan.”
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