Pensioners now own almost £920 billion of property

The average pensioner has made more than £1,000 a month on their property since the end of last year - taking the total value of all housing owed by retirees to a jaw-dropping £917.1 billion.

Since January 2010, the total value of pensioner property has increased £152 billion - which is about a fifth - and works out at an average of £37,160 each.

However, as always, the overall figure masks huge regional variations. Retired homeowners in London were the biggest winners, gaining an average of around £15,061 each in the past three months, while homeowners in the South East of England are more than £4,537 better off and pensioners in East Anglia are £6,448 better off. Only the East Midlands (down £733) and Scotland (down £1,633) have seen falls in the value of their property during this time.

The study was done by Key Retirement Solutions, to highlight the wealth that pensioners have tied up in their homes. It adds that the average person releasing equity from their home takes £72,000 - which could come in handy.

Find out what equity you could release from your home

However, this is only part of the picture.

The figures demonstrate how unbalanced many pensioner's portfolios have become - as many are paper millionaires, but are struggling with day-to-day living costs - let alone the cost of maintaining their property.

In many cases, they would like to downsize. A study by Legal & General found that a third of older people considered downsizing in the last five years. However, only 7% managed, because there are too many barriers.

There are too few homes of the right kind, in the right locations, at a price that is designed to appeal to people who are trading down to their last home. Saga research suggests that 7 in 10 would like to "right size" after retirement, "but many do not feel the current housing stock is aimed at them".

Similarly, Age UK's Housing in later life report says that "We are not building enough of the right type of retirement housing to tempt older people who might wish to downsize".

The transaction costs of buying and selling are also so high that many people are put off - with things like legal costs, stamp duty and removals taking thousands of pounds out of the proceeds of a sale.

Wider problems

And while this creates a headache for pensioners, it causes problems for the wider population as a whole too, because larger and more expensive houses are increasingly owned by older and older people. It's not practical for some older people, and it means many families are priced out of the market.

Legal & General points out that while the government has pledged to tackle the housing crisis, it has focused attention on promises to build more houses, and is overlooking potential steps that would make it easy for older people to downsize and free up their estimated 7.7 million spare bedrooms.

It wants to see the government make downsizing easier - to free up cash for older people and houses for younger ones.

Among the suggestions it has made are encouraging developers to produce more mid-market homes for downsizers - rather than relentlessly focusing on affordable properties and premium homes. It also wants to see more urban developments near community resources, and homes that are practical for older people to live in.

It wants the government to encourage planning authorities to prioritise and standardise housing for the elderly, and offer tax exemptions for downsizing through the stamp duty system.

But what do you think? Should it be easier for older people to downsize? Or is there nothing wrong with the current system? Let us know in the comments.