Just 52% of Baby Boomers – aged 62 to 80 – are already or expect to be mortgage free by the time they retire, according to the latest Barclays Property Insights report.
Asked about their income, three quarters (76%) say they do not plan to access funds from their property to help fund their retirement. Three in 10 (31%) say their home is intended as a legacy for their family rather than a financial asset. In contrast, a small proportion (8%) report they have, or intend to, move to a smaller property to unlock funds for retirement, and 5% intend to use equity release.
Barclays mortgage data shows that over-60s who do purchase new properties choose houses over typically smaller properties, such as flats or bungalows. In part, this is due to the distribution of housing in the UK, particularly a shortage of bungalows.
Properties bought by those aged over 60 are 25.1% more expensive than purchases by those aged 28 to 43, and 79.3% more expensive than those bought by under 27s.
Households continue to build resilience
Amid ongoing economic uncertainty resulting from the conflict in West Asia, households report making changes to reduce their monthly outgoings. Many are cutting back on energy use (61%) and non-essential spending (32%), while nearly three in 10 mortgage holders (27%) say they are making overpayments on their loan to protect against interest rate volatility.
Brits concerned about Renters' Rights Act's impact on rental supply and costs
The latest research finds that since the Bill passed in October, awareness and positivity around the Renters’ Rights Act has dramatically increased amongst tenants. However, many Brits are concerned that in the long-term supply could decrease, pushing up rents. Existing homeowners are also reporting wariness about investing in additional property due to growing cost and complexity, while older homeowners are prioritising keeping their current home as a legacy.
Renters are responding positively to reforms introduced through the Renters’ Rights Act which came into effect on 1st May, with a significant increase in support since the legislation first passed. Six in 10 (60%) say they are aware of the Act and what it aims to achieve (up from 19% in October) and 62% of renters believe it will improve their housing conditions and protections (up from 33%). A further 61% also feel it will make it easier for tenants to challenge unfair treatment from landlords, compared to 28% in October.
This is already influencing behaviour, with 19% of renters saying they are more likely to remain in their current property as a result of the changes. However, there is growing wariness over the longer-term impacts of the legislation. In October, a quarter of renters (24%) were concerned the limitations on evictions and bidding wars could cause rents to increase, which has risen to 45%. Meanwhile the same proportion worry the reforms could lead to landlords leaving the market and reducing supply.
Second homes less attractive
One in 10 (11%) homeowners are considering buying an additional property within the next two years. However, many are cautious – a fifth (22%) say that they would like to own another property, but it feels unaffordable. High maintenance and running costs are the top cited barriers (28%), a quarter (24%) highlight the time required to manage a property, and 21% point to stamp duty costs. For those who have considered or already purchased a second home, the average deposit required is £50,340, alongside stamp duty (£29,849) and third-party costs (£5,698), bringing the total upfront cost to £85,887 on average.
Reluctance to take on landlord responsibilities is also shaping behaviour. Around seven in 10 (69%) homeowners say they would not want to be a landlord due to cost and complexity, while 48% believe owning an additional property is too financially risky in the current economic environment.
Attitudes are also shifting when it comes to buying property as an investment, with many concerned for the impact on the wider landscape as well as returns. More than a third (36%) believe owning additional properties adds pressure to the housing market, while 34% would prefer to invest in the stock market instead of property.
Jatin Patel, head of mortgages, savings and insurance at Barclays, said: “As deposit challenges persist, the measures of the Renters’ Rights Act to curb steep rent increases could give tenants more scope to save, and in turn widen access to the property ladder. However, the longer-term impacts on rental housing remain to be seen, as homeowners weigh up investment in bricks and mortar against other asset classes.
“For most, property is about far more than finances. It provides stability and plays a key role in family legacy, and many retirees do not need to supplement their income through property. ‘Right-sizing’ still has an important part to play in unlocking housing supply, but it will only gain traction if there are clear and meaningful incentives.”
Julien Lafargue, chief market strategist at Barclays, added: “The interest rate environment remains challenging, with domestic political uncertainty compounded with the ongoing geopolitical tensions in the Middle East. Even so, the UK economy continues to demonstrate resilience, suggesting that once these headwinds ease, conditions should improve.”
