Over 55s Dominate UK Property Market

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Posted on: 08 February 2018 by Blair Tabot

Halifax report shows over 55's own more than 63% of the UK Housing Market. How did this happen and what are the government doing to help the current generation of home buyers.

Terrific news for over 55’s, we now own over 63% of the UK's housing market while the under 35’s currently account for less than 4% of the market. It may seem difficult to understand the reasons behind how this sharp contrast has occurred, however, it is beneficial to understand the past position and progress of the financial and housing markets to better inform decisions of the future.

In the current climate and market, it may seem surprising that the UK property market has beaten its previous highest level by surpassing £6tn for the first time in history.  In the study undertaken by Halifax, who recently published their House Price Index, in the face of a financial crisis and a lack of increases in wages, it’s surprising that property prices have remained at an average of 2.7% higher during the ultimate 3 months of the year in comparison to last year’s figures.

https://owl-group-staging.s3.amazonaws.com/upload_datas/50140/landscape_large.jpg?1517503360Delving further into the figures released, we can see that despite the rise in the overall market value, the distribution of this is not equally spread. It is to be expected that those in different generations will have different percentages, but it can be clear to see that the current housing situation is not working for this current generation of house hunters who control a mere 3.3% of the market.  This trend in property ownership can be found through all price and income brackets, with those covering the highest level of UK property purchases, with luxury estate agents, continuing to confirm this huge property gulf between generations. The current property situation has however forced the UK government into providing many subsidised schemes to enable this current generation with the opportunity to invest their earnings in to a new build house. This scheme adds a boost to local house builders, offering the reassurance of continued work and therefore the ability to employ more workers, often from this younger generation, in order to fulfil said demand.

From the 3.3% owned by under 35s to the lion share controlled by the over 55s. An incredible 68% of private property wealth belongs to the ‘Baby Boomers’, who have benefitted from a bountiful and prosperous period in history. Increasing by 62% since 2007 and with a total of £3.8tn we can see that 68% of private property wealth is focused in the south. The large majority of this property wealth can be found in the South East, where its value exceeds that of Scotland, Wales and the North of England, combined. In perhaps good news, depending on individual circumstance, this is a trend that is forecasted to continue as ‘pensioner’ property wealth has grown by £33bn in the last six months. A positive for Generation X is that 33% of Baby Boomers understand this situation and continue to provide financial support to their children. Furthermore, multiple financial reports predict that this current generation will benefit from a substantial windfall thanks to the combined property wealth of both parents and grandparents, which will provide a predicted average of around £182,000.

Viewing what has enabled the over 55s to gain this higher position, the main source is simple enough. The wealth accumulated during the lifespan of the average Baby Boomer is on average 37% more than the equivalent earned today by the under 35, during the same comparable time period. While the average wage lies at a similar comparative level, it is the cost of everyday items and living essentials that has really put the squeeze on this new generation, with most items at an average of three times their equivalent price in the 70s and 80s. It is also impossible to ignore the influence that important factors such as soaring house prices and the largest financial crash since the end of world war one have taken on the ability to invest wisely in housing. 

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Blair Tabot

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