A think tank says the penalties now levied against second home owners - such as the stamp duty surcharge and phasing out of buy to let mortgage interest tax relief - are not enough to address what it calls “the preserve of the wealthy.”
The Resolution Foundation - which has prominent Conservative lord and former cabinet minister David Willetts as its executive chair - has produced research claiming that there has been a 30 per cent increase between 2000-02 and 2012-14 in the proportion of adults who own multiple properties.
It now says the increase - from 1.6m to 5.2m - means one in 10 adults now owns a second home, whether for leisure or investment purposes.
The organisation claims: “Combined with falling home ownership since the early 2000s, the rise of second home-owning in 21st century Britain has underpinned the increasing concentration of property wealth within a declining proportion of families. In contrast to the one in 10 adults with multiple sources of property wealth, 40 per cent of adults have no property wealth at all, up from 35 per cent in 2000-02 and the same level as in 1993-95.”
The analysis finds that alongside an increase in the number of people with additional property, the average value of assets held in these properties has increased by 20 per cent in real terms between 2000-02 and 2012-14 – from £125,000 to £150,000.
The foundation says that there is a clear generational split in terms of who owns second homes, with those in prime age and the early stages of retirement having accumulated the most.
Multiple homeowners are most likely to be baby boomers, the group born between 1946 and 1965 and currently aged 52-71. Boomers account for 52 per cent of all the wealth held in additional properties, with far higher additional property asset levels than those now in their seventies and eighties had at the same age.
Generation X – born 1966 to 1980 and currently aged 37-51 – accounts for a further 25 per cent of additional property wealth.
“By contrast the millennials – born since 1981 – own just three per cent of the additional property assets and are the first group since records began to have less of it than predecessors at the same age had” says the foundation.
The body also claims that “those with a second home are overwhelmingly rich and wealthy” and it wants action - although it fails to specify what that is.
“Contrary to the popular narrative, these second home owners are rarely your typical middle-income worker shoring up savings or ordinary retiree boosting pension income. They tend to be baby boomers who are very wealthy indeed relative to their peers, living in the south and east of England” says Laura Gardiner, senior policy analyst at the Resolution Foundation.
“Recent steps to increase stamp duty on second homes and reduce tax relief on buy to let mortgage are attempts to address this challenge, but policy makers should consider what more can be done to ensure that home ownership doesn’t become the preserve of the wealthy for generations to come” she adds.