Boomers Sit on £2.89 Trillion in Property Wealth
‘Cash Poor Asset Rich’, Cash Poor’ Over-60s Face Pressure to Downsize
Baby boomers’ housing wealth has swelled to a record £2.89 trillion, comprehensive analysis reveals.
Research conducted by the prestigious property firm Savills has uncovered that individuals aged over 60 now own a staggering 56 per cent of the nation’s owner-occupied homes, whilst those under 35 hold a mere 6 per cent of property wealth.
Experts attribute this significant disparity to the substantial rise in baby boomers—those born between 1946 and 1964—becoming entirely mortgage-free. Properties owned by the over-60s demographic are collectively valued at an astounding £2.95 trillion, with only £60 billion of this sum representing outstanding mortgage debt.
In stark contrast, individuals under 35 possess property assets totalling £600 billion—half of which consists of mortgage obligations.
Lucian Cook, the distinguished head of residential research at Savills, commented: “Throughout the past decade, debt has become an increasingly less significant component in the growth valuation of our nation’s housing stock, with substantially more equity becoming concentrated amongst older homeowners and property investors.
“The baby boomer generation has continued to accumulate considerable wealth after having paid off their mortgage debts, whilst Generation X has been diligently working to achieve comparable financial security.
“Meanwhile, Generations Y and Z have experienced substantially reduced opportunities to progress profitably through the housing ladder.”
This development emerges as members of the boomer generation face mounting societal and political pressure to consider downsizing their properties to liberate suitable homes for younger families struggling to enter the property market.
Last month, former Prime Minister Tony Blair’s influential think tank proposed that larger properties should face higher taxation to actively encourage homeowners to downsize from properties that exceed their current spatial requirements.
Researchers at the Tony Blair Institute put forth a controversial recommendation that the existing council tax system—in which bills are presently calculated based on property values from April 1991—should be completely dismantled and substituted with a more progressive levy set at 0.5 per cent of each home’s current market valuation.
Thomas Smith, the institute’s director of economic policy, elaborated that such a reform would “incentivise homeowners occupying larger, under-utilised properties to downsize, thereby improving housing market fluidity and supporting greater economic mobility across the country.”
Statistical evidence from the English Housing Survey indicates that nearly 10 million residences across England possessed at least two unoccupied bedrooms during the previous year, with pensioners representing the most substantial proportion of these spacious property owners.
However, David Forsdyke, a senior representative of Knight Frank Finance, observed that elderly homeowners typically find themselves in the paradoxical position of being “asset rich, but cash poor,” noting that their pension arrangements frequently prove insufficient to cover escalating living expenses in the current economic climate.
Recent figures published by the Equity Release Council revealed that the monetary sum extracted from property values increased by approximately one-third during the three months concluding in March, compared to the same period in the previous year.
Mr Forsdyke further explained: “Older homeowners are increasingly borrowing against their property assets to address their cost of living, which has risen dramatically over the past five years.
“Equity release schemes offer a practical solution whereby these individuals can strategically draw down modest sums to supplement their regular income. Many others simply opt to borrow against their property wealth to financially assist their children or grandchildren, effectively facilitating earlier intergenerational wealth transfer.”
The growing disparity between property ownership amongst different generations highlights profound structural changes within the British housing market. While baby boomers benefited from more accessible property prices during their early adulthood, subsequent generations have encountered significantly inflated housing costs relative to earnings, stricter mortgage lending criteria, and greater financial obstacles to homeownership.
This generational wealth inequality poses complex challenges for policymakers attempting to balance respect for property rights with the need to address housing shortages for younger families. The situation raises important questions about intergenerational fairness and the future structure of housing provision across the United Kingdom.
Property experts suggest that without substantive intervention through policy reform or significant market changes, this wealth disparity may continue to widen, further exacerbating the already considerable challenges faced by younger generations attempting to secure suitable housing.
The reluctance of many older homeowners to downsize, despite possessing surplus space, often stems from emotional attachments to family homes, the prohibitive costs associated with moving, and the limited availability of appropriate smaller properties in desirable locations with adequate amenities for older residents.
Some financial advisers advocate for more innovative solutions that might enable older homeowners to remain in cherished properties whilst simultaneously releasing equity to support their retirement needs or provide financial assistance to younger family members navigating an increasingly challenging economic landscape.