Young people rent - “the old and rich buy”

The UK’s housing market is increasingly driven by older, affluent home owners with younger generations squeezed out. 

That’s the view of data science firm Outra which says the cost-of-living crisis, skyrocketing interest rates and stubbornly high house prices have made it increasingly hard for younger generations to move up the housing ladder.

It claims the median age of those tipped to move home in the next six months has surged 3.5 years in just 12 months amid signs younger households are being paralysed in their efforts to move home.  That leaves the median age at 52.5 years-old, from 49 years-old last year. 

The data indicates that every age band below the age of 45 is set to find it more difficult to move. 

The market is expected to be driven by older households, in particular those that already have significant equity in their homes over the age of 55. 

Outra’s Pre Mover Index, which uses data points to track those most likely to move house, has revealed the increase in the age of those with the financial firepower to move home. 

Outra says the age and wealth profile fits with anecdotal evidence than many moving house are doing so to release equity to fund retirement or to pass funds to their children to help them out of the rental sector.

“The UK’s housing market is now the preserve of the old and rich, and while a boom now will be welcome news to those involved in the day-to-day transactions given fears of a slowdown, there’s a real danger that what this trend indicates is the start of an inheritocracy” says Outra founder Giles Mackay.

“Retiring boomers may be looking to move to a house in the country, seek a new life abroad or downsize and pass on that wealth to their millennial children who otherwise would not be able to get onto the ladder.’

“However, that risks creating an unfair UK house market where those without the Bank of Mum and Dad are locked out of a system where prices are artificially buoyed by generational wealth that has been created passively due to the housing boom over the last three decades.”

Households with significant stored equity – cash tied up in their homes - make up an ever larger proportion of those forecast to move compared with the rest of the population. Those with more than £250,000 of stored equity now represent 52 per cent of those most likely to put their house on the market, compared with 34 per cent a year ago.

Stored equity now appears to be more influential than household income level when moving house, analysis shows, with those earning more the £50,000 a year only marginally more (35.5 per cent of the total) empowered to move than this time last year (30 per cent).