Retired homeowners have suffered a dramatic slowdown in the rate at which their property wealth is increasing due to the housing market slump, figures have shown.

The collectively value of equity in the homes of retired people in England and Wales increased by just 0.3% or £2.27 billion between October and February, well down on the jump of 2.5% or £18.16 billion reported between June and October.

Homeowners in London saw the biggest increase in their housing wealth during the period, with the average home increasing in value by £2,721 once any outstanding mortgage debt was taken into account, according to insurer Prudential.

People in Yorkshire and Humberside were not far behind, with average gains of £2,154, while those in the South West saw rises of around £1,554.

But the amount of wealth retired people have locked up in their homes fell in four of the 10 regions, with Wales seeing the biggest slide at an average of £3,618.

The group estimates that despite the slowdown in property price increases, retired homeowners still collectively have £734 billion of equity tied up in their homes across England and Wales as a whole, around 22% of which belongs to people living in London.

Keith Haggart, business director of retirement income at Prudential, said: "Our Equity Release index is showing that house price inflation is reducing. But it's important that retired homeowners don't lose sight of the bigger picture.

"Most have built up a significant amount of equity in their homes over a number of years so even if property prices do fall, many still have a huge amount of wealth in bricks and mortar."

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