Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Homeowners Six Times Wealthier Than Renters at Retirement, Report Finds
Homeowners are, on average, six times wealthier at retirement than renters, according to new research from Yorkshire Building Society. The report highlights a wealth gap of £793,000 between homeowners and renters at retirement.
The research also projects that today’s 30-40 year-olds could face a wealth gap of £1.6 million at retirement if they do not purchase a home, with this gap potentially rising to £2.6 million by the end of their lives. The modelling suggests that around 70% of renter households are likely to exhaust their savings before the age of 88 if they maintain similar living standards into retirement, compared with just 6% of homeowners.
Yorkshire Building Society’s report, titled "No way home? Restoring Britain’s Housing Ladder", warns that the UK risks creating a “lost generation of homeowners” due to affordability pressures making it increasingly difficult for people to buy their first home. The report also found that homeownership remains a strong aspiration in the UK, with 88% of adults saying it is important. However, confidence in achieving homeownership declines with age: 76% of people aged 25 to 34 aspire to own a home, falling to 59% among 35 to 44-year-olds, and just 38% among those aged 45 to 54.
The report calls for a more coordinated housing strategy, including greater use of existing mortgage lending flexibility, increased housing supply, a review of stamp duty, and a replacement for the Help to Buy scheme.
For letting agents and inventory clerks, these findings underline the ongoing demand for rental properties and the importance of a healthy private rented sector. The report notes that a well-functioning housing market requires both a strong owner-occupied sector and a robust private rented sector.
Source: Mortgage Strategy