Taylor Scott International News
A soaring divide in housing means older people pay just a fraction of the money towards housing that younger people in England and Wales, new research shows. On average the under 35s pay over £6,600 more per household than the over 65s and around £4,400 per household more than the 50 to 64 year olds, says new research from Savills published at RESI, the annual housing conference run by Property Week. The research also shows that households where the main householder is the under the age of 35 spend some £37 billion per year on housing equivalent to £8,600 per household of which 56% is paid in rent to private landlords. In contrast for the over 65s it is just 12 billion or £1,939 per household, reflecting both the extent to which those holds have been able to initially access home ownership and pay off their mortgage. ‘These figures reflect the generational divide in the housing market that needs to be reflected in housing policy. The youngest households have reduced access to homeownership, are paying more rent and have less opportunity to accumulate housing wealth. In London alone they pay around £8.3 billion in private rent,’ said Lucian Cook, director of UK residential research at Savills. He pointed out that significant investment is needed in the private rental sector to meet their needs, with a concerted effort to bring in institutional investment through build to let. But at the other end of the scale, more needs to be done to encourage downsizing, particularly in terms of the new housing we build. Not only would that mean more efficient use of our housing stock, but it would also help housing wealth to be passed down the generations and recycled in the housing market to limit the decline in homeownership. For those in the 35 to 44 age group, whose housing bill of £53 billion or just under £7,700 per household, the key short term focus is on interest rates. Some 63% of their housing costs are taken up by mortgage payments and that a 2% interest rate rise would add 18% to their total housing bill. ‘While the under 35s are protected from an increase in interest rates over the short term, given more of them are renting, this may impact their future access to home ownership because if they do get a mortgage the cost of servicing it will be a greater constraint, particularly given stress testing of affordability following the mortgage market review,’ said Cook. Taylor Scott International
Taylor Scott International, Taylor Scott
