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bigger textPensioner property value continues to rise
British pensioners are sitting on a property fortune of more than £775 billion, according to Lifetime Lease provider to the over-60s Homewise. The latest figures from the Homewise Pensioners Property Price Index (PPPI) show that this figure went up by almost £7 billion during the third quarter of 2007, a collective increase of around £75.9 million every day.
According to the PPPI, the nation's 3.9 million retired households have each gained on average around £21,282 in property value so far this year. In fact, retired households now makes up 27% of the total value of owner occupied UK property, with 93% of these properties now owned outright.
The leading retired hotspots are the South East and the North West, with the North East having the fewest retired households. Despite having fewer retirees, retired households in the South West comprise 32% of the total regional property value, higher than the national average. Also bucking the national trend is the North West, where retired households are making up 30% of the total property value for the region.
Whilst this may look positive, when put into context alongside the £57 billion of pensioner debt and the rising cost of living, the reality is far from rosy. In fact, many pensioners are now facing bankruptcy, a trend which is set to continue as increased life expectancy puts a greater strain on the limited savings pensioners have, while rises in food and fuel prices put their finances under further pressure.
To address these concerns, Homewise has developed the Lifetime Lease, which enables people aged 60 or over to move into a new home at a typical discount of 40% off the property's value. This is calculated by taking into consideration the buyer's age, gender and marital status. They are then entitled to remain in the property for the rest of their life, rent and mortgage free. This can allow people over 60 to raise capital, which can in turn be used to clear outstanding debt and maintain and improve their lifestyle in retirement, without forcing them to downsize.
Mark Neal, managing director of Homewise, said: "It's staggering to see the amount of money tied up in pensioners homes, and worrying that despite this an increasing number of pensioners are experiencing financial difficulty. If people can look past the stigma attached to not owning your home outright, there is a huge amount of potential to use this money to avoid the pitfalls of lower income and afford the dream retirement."
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