A recently released research paper has found that just over one in ten people across Britain own second homes, buy-to-let and overseas properties.
Game of Homes – a report funded by the Nuffield Foundation in conjunction with the Resolution Foundation – found that the total value of additional property wealth totals £941-billion.
The report shows that rising additional property wealth since 2001 has been the flipside of falling home ownership. The latest data (for 2014-16) shows that 5.5 million people reported additional property wealth, up 53 per cent since 2001. The value of additional property wealth has increased from around £610bn in 2001 to £941bn over the same period (both in 2018-19 prices).
The report notes that younger generations are failing to match the home ownership rates of previous generations, with 37 per cent of people born in the 1980s having property wealth at the age of 29, compared to 50 per cent of people born in the 1960s.
However, it finds that younger generations are matching the additional property ownership rates of previous generations, with 7 per cent of those born in the 1960s and 1980s having additional property wealth by the age of 29. This suggests that millennial property wealth is being increasingly concentrated among rich households, says the Foundation.
The report shows that buy-to-let property is now by far the most common form, having grown by 58 per cent since 2006-08. Roughly 1.9 million people have buy-to-let property wealth, compared to 970,000 people owning overseas property (a figure which hasn’t grown since 2008).
“The rise of additional property wealth, particularly among buy-to-let properties, is the flipside of falling home ownership,” said George Bangham, Policy Analyst at the Resolution Foundation. “But 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.”
He continued: “The sheer scale of additional property wealth is an important driver of rising wealth gaps across Britain. And 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.”
Article published 24th June 2019