As you will no doubt be aware, there is a generation gap when it comes to property wealth. The millenniums are also known as generation rent, unable or struggling to get a foot on the housing ladder and strangled by ever increasing rents!
Figures released by Halifax reveal just how wide the gap has become between the older and younger generations and their share of the UKs property equity. The word equity means the difference between the value of the property and the sum owed on the mortgage. Here are the shocking figures:
- 63% of all property wealth is owned by those over 55 years old!
- Only 3.3% is owned by those aged 16 to 34!
- Those aged 16 to 44 only own 15.5% of property wealth!
- The value of privately owned homes has risen by £376 billion in 10 years
- The current value of privately owned homes sits at £6.015 trillion
- Average property wealth per household is £256,912 up from £187,310 10 years ago
- 40% of wealth is owned by those over 65
- Two thirds of those over 65 are mortgage free
- 25% of all property wealth is owned by those aged 55 to 64
These figures are a little disheartening for the younger generation, but of course some of us will be fortunate enough to inherit some property wealth from parents and grandparents; of course, this will not even out the playing field as those from wealthy families will inherit most.
It seems as ever the younger generation are facing the largest uphill struggle with higher education fees, slower wage growth, lower levels of permanent employment and of course a lower chance of becoming a homeowner.
The other worry for the Government is when these young people who do not manage to purchase a home reach retirement age. Scottish Widows suggests that those in their 50s should be saving £6,000 to contribute to their rent in retirement, but of course this will be a struggle for those on lower incomes who already pay a large portion of their pay check out on rent each month. These people will be likely to bring in £200 a week; with the average UK rent at £845pcm and in London £1,250pcm; meaning all of their pension will be spent on rent!
Figures from Scottish Widows suggest that by 2032 one in eight retirees will be renting, which is three times today’s figures! Dan Wilson Craw of campaign group Generation Rent says: “The common perception is that retirees either own their home outright or have a council tenancy, so the Government will be in for a nasty shock as more of us retire and continue to rent from a private landlord. Many renters relying on pensions will qualify for housing benefit which will put greater strain on the public finances.”