Owner-occupiers aged 65-plus hold a record estimated £2.587 trillion of net housing wealth – and their homes are worth a total of £2.735 trillion.
Those figures come from high end agency Savills, which says the vast majority of the over-65s’ wealth is mortgage free.
The analysis reveals that with 50 to 64-year-olds holding an estimated further £2.213 trillion of housing equity (including £679 billion in the private rented sector) in total the over 50s now hold 78 per cent of all of the UK’s privately held housing wealth.
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, according to the agency.
Precisely half of the total housing wealth in the South West is owned by those over 65s. The region which is popular with downsizers and retirees for a host of lifestyle reasons sees older homeowners make up the largest percentage of equity.
However, owner-occupier wealth is highest by value in the South East. Here, over 65s hold £475 billion of housing wealth, which is more than £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.
“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” comments Lucian Cook, head of residential research at Savills.
“The resulting generational divide in housing wealth sits at the heart of a lot of the tensions around housing, and how these older home owners 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.
“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.”
