Over 55s currently own 63 per cent of the UK's housing wealth
Almost three-quarters of British people believe that housing is driving a wedge between generations, according to new research from the National Housing Federation.
And with over 85s owning more of the UK’s housing wealth than everybody under 35, resentment seems inevitable. However, the ill-feeling may only go one way, the poll suggests.
62 per cent homeowners over 55 saying that they would accept either a stalling or a drop in house prices if it would help the young to buy, against just 52 per cent of younger homeowners.
Of the older cohort, 35 per cent would accept a drop in prices, against just 15 per cent of under 35s.
The Housing Federation suggests that the so-called Baby Boomers may be more relaxed about house prices because they are comfortably the most asset-rich segment in society, having already reaped the benefits of decades of housing price growth.
Additionally, this cohort is most likely to have children currently struggling to get on the housing ladder.
David Orr, chief executive of the Housing Federation, called on the government to heed the results and adjust its approach to housing.
“Contrary to political opinion, the British public are no longer obsessed with perpetual house price growth. In fact, the overwhelming majority would now accept a less buoyant market if it made life easier for the next generation. Nobody wants a crash, and we are certainly not advocating one, but politicians need to hear this.
“That so many who stand to benefit would today pass up the opportunity to do so demonstrates the extent of public empathy and underlines the severity of the problem for the young.
The National Housing Federation hosts its annual conference in Birmingham this week.
13 Responses to “Baby boomers would accept a fall in house prices if it helped young people to buy”
Mark Thompson
Well they say they’d be happy with a drop in house prices, but then their cohort diligently votes for parties that (tacitly or otherwise) promise the opposite.
NHSGP
Flog your house for half price to some one younger than yourself.
Er, I meant for someone else to sell me their house cheap.
Imran Khan
No wonder nobody has put their name on this article. It defies the laws of economics.
Boffy
““That so many who stand to benefit would today pass up the opportunity to do so demonstrates the extent of public empathy and underlines the severity of the problem for the young.”
Except no one, other than landlords and housebuilders is benefitting from higher house prices! If you are over 55 and have had your house for 30 years, its paper price might have risen by around 3000%, but what use is that? Its not like owning a share which has risen by 3000%, and which you can simply sell. If you sell your house, you still need somewhere to live, whereas you do not need to buy another share to replace the one you sold.
If all house prices have risen by 500% when you come to buy another to replace the one you sold, that will have risen by 3000% too, and because all of the costs of moving house, such as estate agents fees, and solicitors fees are based on the price of the house, all of those will have risen. And, while you are living in the house, similarly, the cost of house insurance and so on will have risen. Yet the house itself, in terms of its utility, will be less than it was thirty years earlier, because it will be older, will have deteriorated through age, and require expenditure on it, for maintenance and repairs etc.
Moreover, if you bought a house thirty years ago when you were twenty-five, you might have expected to have been able to move up to a better house than one you could afford in your youth. If you paid £30,000 back then in 1986, you might have expected to have been able over the years to save a bit each year, and move up to a £60,000 house. However, whilst your £30,000 house now sells for £150,000, the £60,000 house you would previously have been able to move up to costs £300,000, a £30,000 deficit has become a £150,000 deficit, which you now can’t bridge, which is why so many existing homeowners in that category, have found they cannot move up to a better house, which then also stops them putting their own cheaper houses on the market.
In addition, people in that older age group, with kids, have been morally blackmailed to borrow against their existing house, even where they had paid off their original mortgage, so as to provide cash for their kids, to go to University, or to put a deposit themselves on an overpriced house of their own. So, even nominally any cash they may have enjoyed has been swallowed by the ridiculous rise in house prices, and in place of the asset they acquired in the period when the post-war prosperity allowed workers to accumulate assets, they have now been lumbered with a debt, hence the spectacular rise in the amount and proportion of household debt.
The inflation of asset price bubbles will inevitably burst, and because it has been repeatedly inflated by central bank and government policies, it will burst more spectacularly than every other occasion in history when such asset price bubbles have burst. Unfortunately, for all those who have encumbered themselves with astronomical levels of debt, including all those baby boomers who have themselves facilitated that bubble by lending money to their kids for housing deposits, or to turn themselves into buy to let landlords, will see themselves ruined as a consequence.
wg
Well, I’m in that age group and I bought my house to live in.
Once again we are seeing a persistent agenda to demonise old people when what is really responsible for the housing crisis is the environmentally unfriendly and unsustainable levels of immigration.