Over 65-year old homeowners in England, Scotland and Wales have seen the value of their equity stabilise after two years of decline, according to the latest findings from Prudential’s Equity Release Index.
The over-65s have retained £611 billion of equity in their property and a further £43 billion is held in Scotland. The Index also shows modest gains for homeowners aged over 65 in Wales, the West Midlands, London and the North West.
In Wales, the over-65s saw values rise by £3,448, followed by London’s over-65s who gained £3,296, while in the West Midlands retired homeowners gained £2,789 and the North West saw increases of £818.
Homeowners in Scotland aged 65 and over have retained £43 billion of equity in their property as and saw modest gains in the second quarter of 2009, with an average increase in property values 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.
The Prudential Equity Release Index shows that, in the second quarter of 2009, Scottish over-65s saw the value of the equity in their homes increase by 3.7%. Over the same period, the equity in homes owned by over-65s in England and Wales remained almost level, decreasing by just 0.03%.
The picture across England and Wales as a whole is one of stabilisation, with property equity for the over-65s falling by less than £43 since February – the lowest fall recorded by the Prudential Equity release Index.
The recent fall of just £43 contrasts sharply with the period between October 2008 and February 2009 when property equity in England and Wales for homeowners aged 65 and above dropped by an average of £21,377.
Prudential’s Index reveals that the value of property equity belonging to homeowners aged 65 and over fell by just £161.6 million between February 2009 and June 2009, compared to a drop of more than £80 billion from October 2008 to February 2009.
North East homeowners aged 65 and above saw the highest decline for any region in England and Wales with equity in their homes falling by £4,857 compared with £18,721 from October 2008 to February 2009, while those in Yorkshire and Humberside experienced a decrease in value of £4,209, compared with £13,028 from October 2008 to February 2009.
Keith Haggart, director of lifetime mortgages at Prudential, 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.