Over-65s in the South East own property without any mortgages worth £123.44billion compared with £122.65billion held in London, the index shows.
However property wealth is spread throughout the UK with retired homeowners in the South West holding 15% of the total housing equity stock and a total of £115.64billion.
Dean Mirfin, Business Development Director at Key Retirement Solutions, said: "The housing market has been through a tough time and there are still doubts over the strength of the recovery.
"However it is undeniable that the over-65s own considerable property wealth outright which represents a massive investment success as many of them will have bought their homes more than 20 years ago.
"The property wealth owned outright by pensioners represents a potential source of income for the over-65s particularly when other sources of retirement income are under pressure from low interest rates and annuity rates."
The index shows over-65 homeowners in the North West are most likely to own their home outright – Key Retirement’s analysis shows 684,200 own their homes without mortgages compared with 657,800 in the South West.
However higher property prices in the South East and London means over-65 homeowners there have more property wealth.
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