Retired homeowners are sitting on a multi billion property windfall which, according to research, is preventing younger buyers from moving up the property ladder.
Research published in the Herald found that collectively property in the hands of the ‘baby boomers’ generation has risen to £41.2 billion in value, growing by a record £842 million in the past year.
While the news may be welcomed by those that have paid off their mortgage, the backlog is resulting in lack of housing for those wanting to downsize and leading to increased prices overall.
Experts have warned that action is desperately needed to free up housing and help pensioners move out of large family homes.
Failure to do so will, according to experts, prevent a generation of younger buyers from buying a family home similar in size to their parents’ property.
According to data from financial specialists, the value of property owned by those over 65 has risen 42% since 2010
Over 282,000 homes in Scotland are owned by people aged over 65.
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Dean Mirfin, chief product officer at Key Retirement, said: “The long-term strength of the UK housing market is delivering for retired homeowners who have made around £7,900 in the past year.
“Total property wealth of more than £1 trillion means pensioners who have paid off mortgages can rely on using their homes to generate tax-free returns no matter what happens in the short and medium term.”
Failure to incentivise downsizing may be causing the market to stagnate.
Savills Planner Ruth Highgate, said: “Many older Scots are stuck in a housing trap. The housing market does not fully meet the demands from older people to downsize into suitable retirement accommodation.
“There are a number of challenges facing the Scottish retirement living sector, including relatively high land prices in Scotland compared to other parts of the UK and an inconsistent approach to planning across Scottish local authorities.”
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“However, with a growing older population who have a pressing housing need and equity to invest, not only is there a commercial opportunity, but a corporate responsibility for the planning and development sector to address this important market in Scotland.”
According to official figures, at the end of last year, house prices were £12,000 higher than they had been 12 months earlier.
According to the latest Social Tenants in Scotland report, Scottish tenants spend almost a quarter of their income on housing costs.
Graeme Brown, Director of Shelter Scotland, said: “These statistics once again show Scotland’s broken housing system where young people struggle to get a home.
“At the heart of the problem is demand for homes outstripping supply. To tackle the problem, we need a huge injection of new properties of all tenures - but especially homes for social rent – to reduce inflationary pressures and make a fairer housing system for all.”