15:16 PM, 21st February 2011, About 10 years ago
Most of Britain’s £4 trillion of housing wealth is locked in homes belonging to the over 45’s while young adults face increasing difficulties in climbing on the property ladder.
The over 45s own 83% of the country’s residential property as their own home or buy to let rentals, while those under 35 years old have just a 5% share.
This imbalance in wealth and ownership is unlikely to change in the near future as the mortgage drought is set to continue and lenders warn borrowing is never likely to return to the scale of the peak of the housing bubble in 2007, when £362 billion was advanced in mortgages.
The figures come from a new review of the UK residential property market by estate agents Savills.
Their report shows that Britain’s homes have rocketed in value since 2000, when they were worth just under an estimated £2 trillion, to £4.1 trillion in 2010.
Buy to let boosts value of homes
“This inequality of housing wealth distribution will shape the market going forward, affecting everything from price growth prospects for different tiers of the housing market to the way it is occupied,” says the report.
The report also highlights the big growth sector of the last decade has been the private rental sector.
“The growth in private renting and in the underlying capital value of privately rented properties, has boosted the aggregate value of housing in this sector by an estimated 180% over the past 10 years, to a figure of almost £600 billion,” says the report.
“A continued shift towards private renting, particularly in the lower tiers of the housing market, will not only boost the value of private rented stock. It also means housing wealth is likely to be concentrated in still fewer owners’ hands in the future, not least as wealth earned in the owner occupied sector is reinvested in the private rented sector.”
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