海角视频 homeowners could end up hundreds of thousands of pounds better off over 30 years than people who rent, a new report has revealed.
A person who owns a property could amass up to £326,000 more than a renter over three decades - before potential house price growth is even considered - according to the Equity Release Council.
The organisation, which represents the 海角视频 equity release sector, found that nearly one in three homeowners see their mortgage as an investment in their future.
And nearly half of homeowners with a mortgage agree they are able to save more because their loan is cheaper than renting, due to unprecedented low interest rates.
Around 40% added they believe having a mortgage in later life is becoming more acceptable and 57% said they are looking at ways to release equity from their properties.
Details were published in a report, 'Home advantage: intergenerational perspectives on property wealth in later life', which examined trends that have altered the financial landscape for pensions and homeownership over the past three decades.
Home ownership is expected to become more critical to families’ financial security and wellbeing in later life, but the report also warned of lifelong inequality for those unable to get on to the property ladder.
Younger generations will continue to struggle compared with older generations with building up big enough deposits to get on to the housing ladder, it said.
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The council also said it would be challenging for them to build up savings for retirement.
The end of final salary pension schemes is a significant factor, with the report finding for every £1,000 the average employee earns, they can expect just £150 from a defined contribution scheme, compared with £670 from a defined benefit scheme.
The news follows a recent report by Halifax which named the most affordable and least affordable cities in the 海角视频 to buy a property.
David Burrowes, chair of the Equity Release Council, said property and pensions formed the "bedrock" of financial security for most people, but the rules of engagement had changed substantially over the last 30 years.
“People are living and working longer with responsibility to fund their later years and will need to think differently about their financial decisions at different life stages," he said.
“For those who manage to buy their own home during their working lives, the extra confidence and flexibility this provides will be even more critical to their financial wellbeing than it is today.
“While today’s homebuyers are borrowing larger sums for longer, they are also building considerable equity which can help meet future needs for themselves and their families.”
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He added that future generations expect to receive an inheritance in the form of property or money but many do not expect to receive this until their mid-40s to 60s, significantly later than the typical first-time buyer age.
The report calls for the Government to follow up on its pledge to “help Generation Rent become Generation Buy” with plans to address the fact that 54% of people who are not yet homeowners feel this goal is “unrealistic”.
Jim Boyd, chief executive of the Equity Release Council, said: “Hopes that younger generations will enjoy greater opportunities over longer lives in good health compared to their parents must be balanced by significantly more complicated financial decisions they face, driven by the realities of elevated property prices and the decline of generous pension schemes.
“The long-term impact of Covid-19, which has amplified social trends and tensions including perceptions of intergenerational inequality, is just one factor that will shape people’s financial experiences over the next 30 years.”
Data from the Office for Budget Responsibility (OBR) has shown that retirees have been some of the biggest beneficiaries from the Covid-19 crisis, making huge savings from being unable to spend on holidays and going out.
A stamp duty holiday through much of the pandemic also helped house prices to grow.
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