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Three-quarters of UK housing wealth held by over-50s – Savills

Homeowners aged over 50 hold £2.8trn of housing equity, a new study from Savills has revealed, the equivalent of around three-quarters of the UK’s entire housing wealth.

More than 40% of the nation’s wealth – around £1.6 trn – is held by the over-65s, the study found.

The contrast with younger property owners is stark, with homeowners under the age of 35 holding just £221bn in equity.

Savills identified a stark regional difference in property wealth owned by different generations too. Older households were found to be most dominant in the south west where the over-65s own almost half of all homeowner equity. In fact, those aged over 50 own around 80% of the region’s property wealth, while the under-35s hold just 4%.

London enjoys a less significant generational split when it comes to property wealth though. The under-35s own around 11% of the capital’s housing equity, with the over-50s accounting for almost two-thirds at 65%.

Savills puts this down to London being a hub for young professionals, boasting a lower average age than the rest of the UK.

The study also highlights that the over-65s are not completely debt free. They owe around £112bn on outstanding mortgage borrowing, though this works out at just 7% of the value of their homes.

By contrast, the under-35s owe £117bn, but this is over half the total £22obn of housing wealth they own.

Lawrence Bowles, research analyst at Savills, said that the nation has not seen so much housing wealth concentrated in older hands for a long time, and noted that it is likely that there will be an increase in people downsizing in order to release some of that equity.

He continued: Our analysis shows that there’s truth in the old stereotype of affluent households selling up in London for a ‘move to the country’. The figures for the South West of England are evidence of the trend for older homeowners making a lifestyle move, making the region arguably the country’s largest naturally occurring retirement community.”

Source: Mortgage Solutions UK

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Report highlights stark regional polarisation of housing wealth

Only one local authority area in the whole of England and Wales is yet to see average house prices pass the £100,000 mark, analysis has found.

Blaenau Gwent in South Wales now stands alone out of the 348 local authorities, with Burnley having finally seen the average price of flat and house sales tip over the £100,000 line last year, according to property group Savills.

The average property sale price in Blaenau Gwent in 2017 was £97,147, Savills found.

The research, which used Land Registry data, also highlighted the house price divide between southern England and the rest of England and Wales.

House prices in all local authorities in London and the South East had broken through the £100,000 mark by 2002, with the South West and the east of England following soon after, by the end of 2003.

As far back as 1995, the average sale price in 35 local authorities had crossed the £100,000 line, including nine London boroughs, several high-value commuter hotspots such as Guildford, St Albans, Winchester, Sevenoaks and Woking, as well as a single local authority in the South West – Cotswold, Savills found.

Fifteen years ago, half of all London boroughs had crossed the £200,000 mark, while Trafford, Harrogate and Hambleton, all relatively affluent locations with established prime housing market clusters, were the first northern local authorities to pass the £200,000 mark and did so in 2014, the report found.

Every London borough saw the average sale price exceed £300,000 last year, with Kensington and Chelsea, where the average price is now more than £2 million, having hit the £300,000 price point 20 years ago.

The average values of all sales recorded by the Land Registry in 2017 was £291,388, three times the Blaenau Gwent average.

“It remains to be seen if Bleanau Gwent will finally cross the £100,000 line this year, but this analysis lays bare the stark regional polarisation of housing wealth,” said Lucian Cook, head of residential research at Savills.

“Even if house prices continue to rise in line with the average of the past two decades, it’ll be 2036 before the average sale price in all local authorities of England and Wales reaches the £200,000 mark.

“House prices at a regional level are a clear reflection of underlying regional economic factors, but such polarisation reduces social mobility and perpetuates the haves and have nots of housing wealth.”

Source: Yahoo Finance UK