"Many homeowners approaching retirement, or already retired, are being offered some protection by the strength of their biggest asset."
In a spectacular period that saw property prices in the regions rocket, only three places are in the South, the study by Responsible Life shows.
Topping the list is Burnley in Lancashire where prices have grown 37.1% since the pandemic began in March 2020.
Merthyr Tydfil in south Wales (34.2%) and Bolsover in Derbyshire (32%) make up the rest of the top three.
Swathes of Wales have been hoovered up by house hunters happy to chase prices during the race for space, while locations across the North of England have also been some of its biggest beneficiaries. These include Liverpool, in fourth place, followed by St Helens. Caerphilly came in eighth place with a 27.7% rise in average house prices to £175,694.
The only places in the South to make it onto the list were Bath, Lewes and Torquay. It’s no surprise that all three offer a mix of town and country living away from the big smoke. The City of Westminster was the worst performer — down 3.1% over the same period.
The remaining places in the top 25 list are Middlesbrough, Selby, Rugby, Rochdale, Bolton, Wigan, Barnsley, Boston, Oldham, Warrington, Falkirk, Hartlepool, Wrexham, Bury, Barrow-in-Furness, and Salford.
While the UK housing market is still experiencing the strongest period of annual growth since the early 2000s, a cost of living crisis, interest rate hikes and rising borrowing costs have all led to speculation that the housing market will soon cool sharply.
Nevertheless, many households will be sitting on tens of thousands of pounds of extra housing equity than they were pre-Covid. For a minority, in the most expensive areas, it will run to hundreds of thousands of pounds.
While this has stretched affordability for first-time buyers, it has broadened choices for those in later life. Increases in housing equity reduce the LTVs of those entering retirement with traditional mortgages. This increases their financial strength and raises their chances of securing sufficient ongoing borrowing, should they need it, to support a good quality of life in retirement.
Steve Wilkie, executive chairman of Responsible Life, said: “These housing markets have seen some thundering house price growth since the pandemic began. The cost of living crisis is hurting people of all ages and the rally has stretched affordability to breaking point for younger buyers. However, for retirees, it’s a different story. Many homeowners approaching retirement, or already retired, are being offered some protection by the strength of their biggest asset.
“For those in later life lucky enough to have benefited to this degree, the boom will have provided some welcome headroom in retirement. In fact, fewer homeowners will end up needing a lifetime mortgage early in retirement or at all. Retirement Interest Only Mortgages (RIOMs) are another way of paying off traditional home loans but passing affordability tests has been challenging in the past due to rules surrounding sole survivor income. Shrinking LTVs will have made them accessible to many more homeowners, while others will have much greater scope to borrow against the wealth locked up in their home.”
