Baby-boomers are looking to supplement their pension income by buying more property aided by access to interest-only mortgages which are denied to most first-time buyers according a new study.
Older and already privileged homeowners are fuelling the housing crisis by buying up properties to rent out to those who are unable to compete in the housing market, the Chartered Institute of Housing has found.
The report revealed that in England, the proportion of homeowners aged between 25 and 34 had plummeted from 66.5 per cent 1991 to 36 per cent in 2013/14.
In contrast, over the same period, the percentage of 65 to 74-year-old homeowners had risen by 14.8 percentage points to 77.1 per cent.
In addition, the report found a gap between homeownership rates for different groups of people, with lone parents or single people under pension age being the least likely to own a home while more than 80 per cent of couples with no dependent children or over pension age were homeowners.
The study also found that rising house prices meant that net housing wealth in the UK had grown by £1.22trn since 2003 to £3.3trn in 2003 and more than a third of property-based wealth was held by households where the household reference person was 65 or older.
The CIH has called for a fundamental review of housing policy and sustained action over at least a decade including putting targets and incentives in place for new house building of all tenures.
Gavin Smart, interim chief executive at CIH, said: The UK Housing Review is a stark demonstration of the divides that housing is opening up in our society. For decades, we have failed to build enough new homes to keep up with our growing population, and the gap between the haves and have nots is getting bigger all the time.
For many young people, a home of their own is a distant dream and in the meantime they find themselves renting in a sector where, in many places, rents are equally unaffordable.
Adviser view
Nick Thompson, mortgage adviser at Matrix Capital Limited, based in Shropshire, said: This does not surprise me. With the new pension freedoms on the way, people will be looking to diversify their portfolios. What a lot of people do not take into account is the added costs to buying a property.