Head of residential research says there is ’little incentive’ for boomers to downsize
Owner-occupiers aged 60 and above are sitting on a record £2.89 trillion of net housing wealth in the UK, according to estimates by property firm Savills.
The new research illustrates the scale of the disparity in home ownership and housing wealth in the country.
The over-60 age group controls more than half (56%) of the UK’s owner-occupier housing wealth, while those over 75 control almost a quarter (23%). By contrast, under 35s hold just 6%.
Savills reported that the UK’s largest tenure by value is those who own their homes outright, with the net housing wealth of over-60s in homes being worth a total of £2.95 trillion. This is due to above-average growth in the number of older homeowners becoming mortgage-free in the last decade.
However, the over-60s are not completely without debt. They have a total of £60 billion mortgage borrowing still outstanding, but this is just 2% of the total value of their homes.
Savills’ latest assessment of housing wealth also found that the under-35s hold property with a total value of £600bn, but have a total of £300bn mortgage borrowing yet to pay.
Lucian Cook, head of residential research at Savills said generations Y and Z “have had much less opportunity to work their way up the housing ladder profitably.”
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Cook explained: “But despite many older homeowners holding on to properties that are now too big for their needs, there is little incentive for them to move during their lifetime. While boomers make up 44% of homeowners, they only made up 18.5% of homebuyers last year. Meaning that just one in 57 of them moved house.
“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 get on and trade up the housing ladder.”
Baby boomers make up the highest proportion of homeowners in the South West and Wales (49%), which are popular locations for downsizers and retirees. In London, they account for the lowest proportion of property owners (38%).
However, the South East has the highest value of owner-occupier wealth, with over-60s holding £603 billion, which is a fifth (21%) of this age group’s net housing wealth.
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