0:02 AM, 2nd May 2023, About 10 months ago
Research reveals that owner-occupiers who are older than 65 have £2.587 trillion of net housing wealth in homes that are worth £2.735 trillion.
The finding from real estate firm Savills shows that most of that wealth – £2.038 trillion – is held by mortgage-free homeowners.
For those aged between 50 and 64, their worth is £2.213 trillion in housing equity – including £679 billion in the private rented sector.
Savills says that the over-50s in the UK now hold 78% of all of the privately held housing wealth.
Lucian Cook, Savills’ head of residential research, said: “While falls in mortgaged homeownership among younger households have abated over the past five years, older households have benefitted from the bulk of growth in housing wealth over the past decade.
“Primarily this is because those who took advantage of the boom in homeownership in the latter part of the 20th century have reached the point where they have paid off their mortgage debt.
“But it also reflects the wealth they have accumulated in residential investments, which they have seen as an important part of their retirement provision.”
He added: “The resulting generational divide in housing wealth sits at the heart of a lot of the tensions around housing, and how these older homeowners elect to deploy their equity has the potential to shape the market for the next generation.
“Differing attitudes towards new housing delivery, property taxes and buy-to-let investment are all heavily influenced by the gap between the haves and have-nots.”
Mr Cook continued: “As we look forward, higher mortgage costs and rising rents mean we expect to continue to see the bulk of housing policy focused on the needs of younger households.
“However, the provision of more retirement housing, along with other incentives to make downsizing more appealing are also fundamentally important.
“Such measures would help unlock much-needed family housing and equity that can be used to help younger generations to get on and trade up the housing ladder, especially given the vital role the Bank of Mum and Dad increasingly plays in accessing the UK housing market for the first time.
“In the private rented sector, there is a delicate balance to be struck. With several private landlords at or approaching retirement age, too tight a policy squeeze risks creating further pinch-points in the availability of private rented stock.”
Over the past 10 years, the amount of net housing wealth held by owner-occupiers aged 65 and over has risen by over £1.111 trillion, Savills says.
Half (50%) of the total housing wealth in the South West is owned by those over 65s and the region is popular with downsizers and retirees for various lifestyle reasons.
However, owner-occupier wealth is highest by value in the South East where over 65s hold £475 billion of housing wealth.
That’s £8 billion more than the total for the whole of the North of England and Scotland combined.
The South East has also seen the biggest increase in housing wealth held by those over 65s over the past 10 years, increasing by £248 trillion, which is more than 2.5 times the growth in housing equity seen by those under the age of 50 in that region.