A new study has found that there has been a 30% increase in the number of adults who own multiple properties, up from 1.6 million in the period between 2000 and 2002 to 5.2 million people in 2012-2014. This means that one in 10 Brits now owns more than one house.
The study by the Resolution Foundation further shows that these second-homeowners have managed to increase the value of their assets as well, with an average increase from £125,000 in 2000-02 to £150,000 in 2012-14 – a rise of 20%. Overall, the wealth held in these second (and third, etc.) properties had a gross value of £760 billion, marking 15% of the total £5.2 trillion held in gross property wealth in the UK. And this wealth could easily be accessed through equity release.
These multiple homeowners are mostly likely to be baby boomers – those born between 1946 and 1965 – who accounted for 52% of all the wealth held in additional properties. This age group also has a much greater amount of property wealth than those now in their 70s and 80s had at the same age (i.e. when they were 52-71).
Those born between 1966 and 1980, called Generation X, accounted for 25% of property wealth. In contrast, millennials (born since 1981) own just 3%, and are the first group since records began to have less additional property wealth than their predecessors had at their age.
Indeed, four in 10 adults (40%) have no property wealth whatsoever, up from 35% in 2000-02. And this is while the recent challenging environment for private pensions and the change to the state pension age makes it more important for people to consider property wealth as a way to support their retirement.
It's especially beneficial for those who are landlords, as 79% of those who earn income from additional properties through rent are in the top half of income distribution. There are some regional differences in this though, with 59% of landlords located in the South West, South East, East of England and London, which are also the areas where incomes and average wealth are highest.
Since, however, the majority of second-homeowners are quite wealthy to start with, the Government has been taking steps to increase stamp duty on second homes and reduce tax relief on buy-to-let mortgages to attempt to level the playing field. To make sure that additional properties keep providing value, it's therefore important to find the right buy-to-let mortgage to keep repayments low.
For those 40% that are still staring up at the property ladder, unable to climb on, saving for a deposit can seem like a daunting task. As the above figures have proven, though, it's certainly a worthwhile endeavour.
So, why not have a look at our guides for some tips on how to save up for a deposit, see what rates you can get on the top savings accounts to help your funds increase over time, and once you're ready, don't forget to pick a competitive first-time buyer mortgage to see you on your way.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.