More than one in 10 people in Britain own second homes, buy-to-let and overseas properties worth a total of almost £1tn, a study has found.
Research by the Resolution Foundation think tank, funded by the Nuffield Foundation, said the latest data, compiled for the years 2014 to 2016, shows that the proportion of adults who live in a family with property other than their main residence rose from 7.9% (3.6 million people) in 2001 to 11.2%, or 5.5 million people.
Based on individual owners rather than families that benefit from additional property wealth, the report found about one-in-ten British adults reported holding some form of additional property themselves in 2014-16, more than 4.3 million people.
The report also found the value of additional property wealth has increased from around £610bn in 2001 to £941bn over the same period.
Additional properties accounted for 15.8% of the total £6tn of overall property wealth held by households in Great Britain in 2014-16.
Additional property wealth is accumulated over time and is most common among older generations, said the report.
Around one-in-six of those born in the 1950s had additional property wealth in their family in 2014-16.
Buy-to-let property accounts for the largest group of additional property owners (1.9 million people), followed by second homes (1.4 million) and then overseas property (970,000 people).
Looking at change over time, the biggest component of the increase in additional property ownership from 2008-10 to 2014-16 was in buy-to-let properties, the report found.
The number of people owning buy-to-let property rose by more than 50% over this eight-year period.
The report also pointed out the number of buy-to-let mortgages has also risen 15 times since 2000.
Three major reasons for owning additional property were providing rental income, giving security in retirement and passing on wealth to younger relatives, the report found.
“Multiple property wealth has grown rapidly over the last two decades,” policy analyst George Bangham said.
“While young people in particular are less likely to own their own home than previous generations, those that do own are more likely to have more than one property.”
It was found that 37% of people born in the 1980s owned property wealth at age 29, compared to 50% of people born in the 1960s.
In an era when “generation rent” exists alongside the highest levels of property wealth that the country has ever seen, the report concluded there is a case for thinking more broadly about how to ensure that housing is taxed fairly and efficiently, and how to reduce its concentration so that each generation has a fair opportunity to own a home of their own.
Mr Bangham said the sheer scale of additional property wealth is an important driver of rising wealth gaps across Britain.
“As the huge stock of second homes, buy-to-let and overseas properties starts to be passed on to younger generations, Britain risks becoming a country where getting ahead in life depends as much on what you inherit, as what you earn,” he added.
Source: Yahoo Finance UK