Home inheritances are a thing of the past, according to a study by the Hamptons real estate agency

For decades, inheriting property has been one of the surest routes to financial security, thanks to skyrocketing house prices.

But anyone hoping for a legacy to remedy their financial woes is warned to lower their expectations.

A study by real estate agency Hamptons reveals that falling homeownership rates will reduce the number of estates that include a home. Currently, four in five estates own property, which will slow the flow of wealth through generations, according to David Fell, principal analyst at Hamptons.

This means that people can no longer rely on the money they get from their parents’ or grandparents’ home to pay their mortgage or buy a larger property.

The trend will also have an impact on the Treasury, by reducing tax revenues. Inheritance tax, which applies to inheritances, amounted to £7.5bn in the 2023-24 financial year, up from £7.1bn the previous year, but is likely to fall in future.

The Hamptons research reveals that 79.2 per cent, or 175,000 of the 221,000 estates that contained assets in the 2021-22 financial year, owned a property.

This is the highest number of people who have owned their own home since the end of World War II. In the 1950s, less than half of the deceased were homeowners, compared with 66% of people aged 65 or older who own their own home today.

But those numbers are destined to plateau and then decline.

Fell also highlights the growing number of properties that were still mortgaged at the time of the owner’s death.

More than 10 per cent of households still had an outstanding loan with the average debt at £100,000, up from £65,000 a decade ago.

This trend of older people taking out large mortgage loans is likely to increase. People are getting on the housing ladder later in life and taking out mortgages with longer terms.

Bank of England data shows that up to one million mortgages taken out in the past three years have end dates after the state pension age of 66.