More than half of the UK's net housing wealth, specifically 55 per cent, is concentrated in the hands of owner-occupiers aged 60 and over, new analysis from a property firm indicates.
The study by Savills estimates this demographic collectively holds a staggering £3.84 trillion in housing equity. Approximately £2.92 trillion of this sum is tied up in main residences, with the remaining equity distributed across buy-to-let investments and other residential properties.
Lucian Cook, head of residential research at Savills, commented: "Housing is clearly a massive store of wealth in the UK, especially for older homeowners who hold high proportions of both owner-occupier and buy-to-let housing wealth."
“Much of it is concentrated in London and the South East, where owner‑occupiers aged 60 (plus) alone hold just over £1 trillion in net housing wealth.
“Over the past year we have seen more robust first-time buyer transactions as mortgage regulation was relaxed, but the passing of equity between generations is still going to be a prominent feature of the housing market in coming years.
“Some of the pressure we are seeing on private landlords is likely to unlock some housing wealth, as older investors cash in on the gains they have made in retirement.
“But overcoming some of the psychological, economic and practical barriers to downsizing would potentially have a bigger overall impact on the housing market.”
It comes as home buyer demand across the UK softened in March, a trend attributed to rising mortgage rates and global uncertainty exacerbated by the ongoing conflict in the Middle East, according to property website Zoopla.
The portal reported a 2% annual decline in agreed sales, noting that the market is largely being propped up by committed buyers who have already secured their mortgage agreements.
Despite the overall slowdown, some parts of the UK, including Wales, Yorkshire and the Humber, and London, saw sales agreed remain flat or even slightly increase compared to last year. However, buyer inquiries were down by 13% year-on-year, indicating that potential purchasers are increasingly adopting a cautious, "wait and see" approach before entering the market.
It said that buyer demand has been running below last year’s levels across the first three months of the year.
The overall number of homes for sale has increased by 6% annually, reflecting a continued desire among homeowners to move despite the more uncertain backdrop.
