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The Inheritance Economy and The Rise of Younger Landlords

Trillions will soon to be inherited, but how much will enter the PRS? Peter Hemple reports

According to a new report by King’s Court Trust, £5.5trn worth of wealth will be transferred to younger generations in the UK between 2017-2055, peaking in 2035.

Simon Hancox, chief executive officer at Kings Court Trust, says: “Between 1995 and 2015 the total net worth of households increased from £2.8trn to £10.2trn. This rise in wealth is only set to grow, with the younger generation set to receive a bigger inheritance than ever before. This report, produced for us by The Centre for Economics and Business Research (Cebr), examines a phenomenon of increasing importance in the UK – intergenerational transfers of wealth.”

Nowhere has the rise in wealth been more evident than in housing. Over the 26 years between the start of 1996 and the end of 2021, average UK property prices rose by 400%, according to the Nationwide house price index, a five-fold increase. This is far more than general inflation and earnings growth over the same time frame, with homeowners seeing a substantial in-crease in their wealth.

Not all have shared in the boom in UK housing wealth, however. Rising levels of unaffordability have contributed to a situation in which homeownership has declined sharply for those under the age of 35, while ownership rates have actually increased slightly for the over 65s, which is the only age group that has seen ownership rates increase since 2004, and almost 80% of the over 65s own their home.

The silver pound and the rise of the inheritance economy
The growing number of over 50s has in part led to the rising role of the ‘silver pound’ in the UK economy. According to the Office of National Statistics (ONS), this year there are 26.1m over 50s in the UK, which equates to almost 39% of the total population. However, Cebr re-search suggests that the over 50s currently hold about 70% of all UK household wealth.

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