£654 billion of property equity owned by UK pensioners according to Prudential

As signs of recovery appear in the UK housing market the latest figures from Prudential’s equity release index show that homeowners in England and Wales aged +65 have retained £611 billion of equity in their property with an additional £43bn held in Scotland.

Homeowners aged +65 saw property value increase by £3,448 in Wales, followed by London with £3,296, West Midlands £2,789 and the North West seeing increases of £818.

Scottish homeowners aged +65 retained £43 billion of equity in their property with an average increase in property value of £5,235 since March, although the total value of property equity for the over-65s is still more than £3 billion lower than it was a year ago.

Prudential’s equity release index revealed that the value of property equity fell by £161.6 million between February 2009 and June 2009.  This contrasts with a drop of over £80 billion from October 2008 to February 2009.

Property equity decline highest in North East

The North East saw the highest decline for any region in England and Wales with a fall of £4,857 compared with £18,721 from October 2008 to February 2009, while Yorkshire and Humberside saw a fall in value of £4,209, compared with £13,028 from October 2008 to February 2009.

Prudential Director of Lifetime Mortgages Keith Haggart said: “A good many pensioners will be cheered by the news that property values appear to be stabilising and in some parts of the country are even increasing. This could bode very well for people considering using their home as an asset to boost retirement income.

“Of course falling property prices have affected every homeowner but it’s important to remember that many homeowners now aged 65 and above bought their homes years ago and have benefited from longer term growth in the housing market. Many people in this age group have lived in their home for twenty years or more. The fall in house prices over the last couple of years appears to have slowed and, if house prices do rise in the future, the retired population could expect to see their wealth increase.

“For many people, selling up and downsizing isn’t an especially attractive option, and they don’t want to face the emotional wrench of moving house. Equity release has an important role to play in providing retirement funds particularly when other sources of income are under pressure.”

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4. Nationwide Report House Price Increase