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Tory-led body says second home owners should be penalised more

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.

  • Simon shinerock

    Nonsense, the aspirations of millions are being sacrificed to this politically motivated, disingenuous or just plain ignorant thinking.

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    More trash - so now the Tories are saying "work had, save, store you savings in a second home because we don't know where else is sensible and we'll penalize you for it to give it to anyone that want a free or cheaphouse"...more of a libtard dumb tank than a Tory think thank.

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    More nonsense stiffing the middle income earners. Those wealthy enough to own several homes will be able to accommodate any additional costs. those, like myself, who earn a lower than average wage, squeezed even more by austerity and zero wage growth, have a low pension and use a small single property investment as a way to boost pension and income will be hit the hardest. The cons making sure the super rich will be looked after but the those in the middle with any aspirations will be kept firmly in their place.

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    It is impossible to view housing in isolation from the rest of the economy. The poverty of newcomers to the property market starts of course with the heavy debt that students pick up on the back of an outdated education system. It seems to be the key part of life which was never reviewed properly once the heavy bills started. Most degrees like English are run over three years and most students reckon they could complete the work in 18 months. That's important when students are paying so much every year and a key consideration when borrowing against a mortgage. This so called think tank is just about jumping on the media band wagon of persecuting hard working people who are struggling to make their own pension provisions rather than using the tories friends in the city! This is simply about herding innovative small time investors back into the corale of the tories friends the pension companies. Lastly it seems obvious that the baby boomers will have more wealth since they are much older than generation X and several gerations older than the millennial. Let's also not forget that those boomers had to live through the 1970's when the Labour Party practically bankrupted the country. They also lived through Ted Heaths 3 day week and the Winter of discontent. I have already gone on a bit much but to me that demonstrates the complexity of the issue rather than the oversimplification of a think tank looking at one narrow issue in isolation. Wonder if there are any experienced estate agents in the think tank?

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