Housing Wealth and Inheritance

Abstract

ABSTRACTOwner-occupation is now an important source of wealth for many people. Housing has experienced price appreciation much in excess of most other assets over the last 20 years and, at the same time, owner-occupation has expanded dramatically. This paper first discusses the impact that this growth in popular wealth holding has had on the overall distribution of income and points to its great importance for all groups except the very wealthy. The importance of housing wealth to the individual is also discussed. Despite the importance of housing wealth, both at an individual and at the broader level, there is virtually no evidence on the transmission of wealth between generations for the mass of people with moderate wealth. This paper rectifies this by analysing the patterns of inheritance of housing wealth for a sample of estates in Glasgow. The evidence shows that wealth left by owner-occupiers is typically passed to a very small group in the close family. The amount of money received can be quite substantial, but tends to go to those in the same or the following generation, that is, people already in middle or old age themselves. Thus, housing inheritance is not likely to be passed directly to young, first time buyers, but to people who already have an established housing career.