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New data has revealed that retired homeowners who've paid off their mortgage have accumulated a record £1.101 trillion in property wealth in August. As a result, the wealth of these homeowners increased by £3,500 per month in the three months to the end of August.
The figures, from Key Retirement, show that more than £47.2 billion has been added to the property wealth of those over 65 across the UK in the three months to August, thanks to continued house price growth. In fact, since Key first started collecting this data in 2010, retired homeowners have seen their housing wealth grow by 41% or £321 billion – the equivalent of about £68,500 on average per person!
The biggest increases of late can be found in London, which saw an average rise of £16,987 between May and August, followed by Scotland (£12,046) and the South West (£11,991). While there have been signs that house price growth has dampened of late, Dean Mirfin, chief product officer at Key, said "pensioners who have paid off mortgages can still rely on tax-free returns no matter what happens in the short and medium term."
The data further revealed that, across the UK, the number of households with people aged 65 and up who own their home outright stands at an impressive 4.7 million. Focusing in, those in the South East can claim the most property equity, accounting for £210.5 billion of the overall £1.101 trillion spread across 656,000 households, while London takes second place at £178.9 billion, across a lesser 366,000 households.
However, just because these houses are worth an impressive amount, doesn't mean these retirees are making the most of it. Luckily, Dean stated that "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."
This means those fortunate homeowners are releasing on average around £68,500, which can be put to good use towards things such as retirement funds, luxury holidays, helping out children or grandchildren with a house deposit, and much more.
So, if you haven't done so already, consider taking advantage of the growing equity in your home through equity release.
Alternatively, if you're still looking to pay off the mortgage on your home so you can take maximum advantage of it later in life, consider switching to a top mortgage deal that allows overpayments.
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