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.
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13 Responses to “Baby boomers would accept a fall in house prices if it helped young people to buy”
Boffy
Immigration, really? If it wasn’t for all the foreign construction workers we wouldn’t be getting anything like, even the low level of construction work that is currently happening! The real start of the rise in property prices occurred during the 1980’s, when they quadrupled. Incidentally, I garbled my numbers above, because I was basing it on my own experience.
In 1977 I bought my first house for £5,000, which by 1988 had risen to £23,000. I bought my second house in 1988 for £30,000, which I sold in 2010 for £150,000. So, effectively between 1977 and 2010 prices had risen by around 3,000%, whilst between 1988 and 2010, they had risen by around 500%.
The rise in house prices has nothing to do with immigrants and everything to do with lax credit policies, and encouragement for people to over borrow, as well as government policies to artificially inflate speculative demand for property, whilst restricting the supply of new housing, particularly by stopping all new council house building.
But, the real cause of high house prices is speculation on the back of those loose credit policies. We keep being told that there is a shortage of supply, but in fact, there are 50% more homes per head of population today than there was in the 1970’s! There are over 1 million empty homes, and planning permission for around half a million more that has not been activated.
We keep being told that there is a shortage of supply and excess demand, and yet if that were really the case, the very high prices would lead to high profits for builders causing them to build many more homes for sale. Yet, they do not, do so, and the reason is, that although there may be high levels of housing need that is not the same as high levels of demand at current prices. No one can afford to buy houses at their current prices, which is why builders will only build small numbers of them, on the basis of only building what they know they can sell.
When as they soon will, house prices collapse, land prices will collapse too, which will considerably reduce the major cost of building new houses, which will mean that builders can build houses to sell at lower prices that more people will then be able to afford to buy, so that builders will be able to build more houses that they can sell, which will in turn create larger profits for housebuilders.
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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.
And you believe them?
Michael WALKER
If house prices halved in the UK, most banks and building societies would be bankrupt and stop lending money.
And anyone who had bought a house on borrowed money in the past five years would have negative equity and be unable to move.
So that’s the housing market well and truly stuffed as no lending = no new build.
Boffy
The fact that banks and building societies went bust would not mean that the deposits in those banks and building societies disappeared. A bank or building society going bust really means that the share and bondholders lose their shirt, not the depositors, especially as we have state backed deposit guarantees. It would be a great opportunity for those banks and building societies to be taken over by their workers, turned into a large new co-operative bank, and provide lending to new borrowers that would be far more safe and sustainable, because it would be based on realistic rather than unrealistic house prices. There are vast reservoirs of loanable money-capital, and it is continually being produced from revenues. It is not somehow manufactured out of the air by banks and building societies.
The mortgages that the banks and building societies already hold would still mean that mortgagees had to continue paying their monthly instalments, whether they were in negative equity or not, and that revenue provides the basis for lending to new borrowers. There are a lot more people who bought their houses prior to the last five years than those who bought them in the last five years. The fact is that house prices are in such a bubble that for someone who bought a house 20 years ago, house prices could fall 75%, and they still wouldn’t be in negative equity!
Such people with a 75% drop in house prices would be in a position to move up the housing ladder, freeing up their cheaper property for first-time buyers.
Michael WALKER
Boffy
I suggest you read a good account of the 2008 Crash.