Research by the world’s leading high-net-worth mortgage broker, Enness Global, has looked at the average first-time buyer house price for the world’s 10 richest billionaires in proportion to their current net wealth.
The average wealth of a 25-34 year old in Britain is currently £125,700 according to the Office for National Statistics. It’s clear to see why we have an obsession with bricks and mortar, as 43% of this wealth (£53,700) comes in the form of property wealth.
Exclude property wealth for those yet to take their first step up the ladder and the average wealth of a 25-34 year old in Britain sits at £72,000. With a current average first-time buyer house price of £205,662, Britain’s first-time buyers are purchasing at 2.9 times their average wealth.
Enness then looked at the current wealth of the world’s 10 richest billionaires in proportion to the average Joe and what they would be coughing up as a first-time buyer.
Despite his eye-watering divorce settlement, Jeff Bezos is still worth approximately £134bn. If he were to have purchased his first home at 2.9 times his wealth, the property would be valued at a huge £388,413,891,630!
The current UK housing market is estimated to be worth £7.388trn. With his first-time buyer purchasing potential of £388.4bn, Bezos could snap up 5.3% of the whole UK housing market as his first property purchase.
Just Elon Musk and Bernard Arnault and Family are the only others to join Bezos in the 12 digit club where current net wealth is concerned. Musk is currently worth £130bn meaning a first-time buyer purchase in proportion with the average British FTB would see him snap up a property worth £376bn; or 5.1% of the entire UK property market.
Bernard Arnault and Family would enter the market as first-time buyers with a property valued at £327m based on a proportionate purchase at 2.9 times their current net wealth (£113bn). Enough to purchase 4.4% of the whole UK market if he wanted to.
If Gates and Zuckerberg purchased as first-time buyers it would be for properties worth £259bn and £200bn respectively. Between the two of them, they could purchase 6.2% of the entire UK market.
While he ranks as number 10 on the list, Mukesh Ambani is still worth a cool £55bn. Although he might have to purchase a property with a few less bedrooms than Bezos, he’d still be looking at a property valued at £161bn as a first-time buyer in proportion to the regular market.
Based on their first-time buyer property purchasing potential, it would take just 71 of the world’s top billionaires listed by Forbes to purchase the entire UK property market. In contrast, it would require 35.9m average UK first-time buyers to do the same.
Managing Director of Enness Global Mortgages, Hugh Wade-Jones, commented:
“We’re certainly not trying to rub salt in the wound of the nation’s first-time buyers, who face an uphill struggle when it comes to climbing the ladder due to the inflated price of property in Britain.
However, it’s important to note that property purchasing power isn’t just about the deposit you can accumulate upfront and, in fact, your overall wealth and the income you earn is a far more influential factor.
The declining availability of mortgage products for those purchasing at the lower end of the market is a very real issue at present.
Many lenders have dramatically reduced their range for those with lower incomes, or those heavily reliant on commission, as well as the self-employed. As a result, many first-time buyers and even second and third rung buyers are finding themselves unable to secure a mortgage in what are otherwise very hot market conditions.
Of course, for the super-wealthy, this isn’t an issue and with interest rates remaining at record lows, there are some extremely good deals to be done. Private banks remain very keen to do deals across the upper tiers of the market and those that exceed a certain wealth threshold aren’t even required to undergo a financial stress test before borrowing.”
|Average wealth of a British first-time buyer in relation to property price|
|No.||Data Description||Data Point||Source/Info|
|1||Average wealth (age 25-34)||£125,700||Office for National Statistics|
|4||Private pension wealth||£32,300|
|6||Average wealth excluding property wealth||£72,000||2+4+5|
|7||Average FTB house price||£205,662||Gov.uk|
|8||Wealth vs FTB House Price||2.9||7/6|
|Name||Approx Net worth ($)||Approx Net worth (£)||Proportionate FTB Property Purchase Price||% of UK housing|
|Bernard Arnault & family||$153,100,000,000||£112,606,121,700||£326,557,752,930||4.4%|
|Forbes Live List (Collected 13/01/2021)||Based on exchange rate of 0.735507 GBP to 1 USD||Net worth*2.9||Based on the UK property market total value of £7.388trn divided by purchasing potential of each person (Source: Savills)|
|Data description||Data point||Source|
|UK property market value||£7,388,000,000,000||Savills|
|FTB ave house price||£205,662||Land Registry|
|Number of first time buyers to purchase the whole UK property market||35,923,072||Prop market value divided by FTB price|
|Number of the top billionaires listed by Forbes||71||Forbes – based on average wealth of each person before £7.388bn threshold is met.|