Britain’s over 60s hold over nine times more of the housing wealth than those aged under 35, new data has revealed.
Owner-occupiers aged 60-plus now hold a record estimated £2.89 trillion of all owner-occupier housing wealth across the country, according to Savills.
That equates to 56 per cent of all housing wealth, with those aged over 75 controlling almost a quarter.
That compares to people aged under 35, who between them, hold just 6 per cent of owner-occupied housing wealth in Britain.
Much of the disparity in housing wealth is to do with the fact that over 60s have had amuch longer financial lifetime and so are more likely to own a home than under 35s.
They have also benefited from vast house price gains during their lifetimes, Nationwide’s index shows house prices have grown 2,600 per cent over the past 40 years.
Those over 60 are also largely mortgage-free with the majority having paid off their home loans.
Those who are under 35, who do own a home are earlier on in their homeownership journey and therefore more likely to be owning with a mortgage that represents a large portion of their property’s value.
The over 60s are not completely debt-free, according to Savills. They have a total of £60 billion mortgage borrowing still outstanding, but this is just 2 per cent of the total value of their homes.
In stark contrast, the under 35s hold property with a total value of £600 billion, but have a total of £300 billion mortgage borrowing still outstanding.
Albeit, this means the cohort who do own a home by their mid-30s have a surprising 50 per cent of equity.
‘Over the past 10 years, debt has become a less important component of the growth in the value of the nation’s housing stock, with increasingly more equity concentrated among older homeowners and investors,’ said Lucian Cook, head of residential research at Savills.
‘The baby boomers have continued to build wealth, having paid off their mortgage debt, and Generation X has been working hard to achieve the same goal.
‘Meanwhile, Generations Y and Z have had much less opportunity to work their way up the housing ladder profitably.’
Older homeowners aren’t keen to move
One issue that is blocking the transfer of housing wealth from filtering down to younger generations is the reluctance of older homeowners to downsize.
Boomers make up 44 per cent of homeowners, according to Savills, however, they only made up 18.5 per cent of homebuyers last year. This means that just one in 57 of them moved house.
‘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,’ added Cook.
‘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.’
How the wealth divide changes across the country
On a regional basis, baby boomers make up the highest proportion of homeowners in the South West and Wales, according to Savills.
Almost half of homeowners in those two regions are baby boomers – both popular with downsizers and retirees for a host of lifestyle reasons.
Comparatively, over 60s make up the lowest proportion of homeowners in London at 38 per cent.
However, owner-occupier wealth is highest by value in the South East.
Here, over 60s hold £603 billion of housing wealth, which equates to 21 per cent of net housing wealth held by this age group.
This is £203 billion more than in London and £171 billion more than across Wales and the South West combined.
