So what happens when we're all old and we don't own our homes?

[user8665410]

Genuine question.

I'm a millennial with no hopes of ever buying a property despite earning a decent income.

There are many in my situation.

What happens when we're all in our 70s, 80s and 90s - which we will be because medical technology keeps letting us live longer - and no longer able to work. Where will we live? Who will support us? Will we just get kicked out of our homes we've been renting for (potentially) decades??

My current rent is £2,585.00, the State won't be supporting that I'm sure.

This. It’s inheritance that is the biggest driver of continuing inequality, not bloody private schools. Yet the same people who rail wildly against private schools will wildly defend their inheritance. Go figure 🙄

Yet the same people who rail wildly against private schools will wildly defend their inheritance

Apart from the fact that you are comparing apples and oranges, what evidence do you have that this is the case?

I think your issue is that you think that things will remain the same as they are now in 20+ years. That just isnt going to happen.

The property bubble is international and caused by speculators and developers primarily in large international cities (such as London), who are leveraged to the eyeballs, sitting on empty and half-developed properties.

Remote, nomad and contractual employment is going to end the dominance of large cities as a base, as well as them just becoming shittier for ordinary people to live as councils government funding is cut and dodgy developers do all kinds of things to get out of the charges that they should pay.

IMHO the whole structure of housing is likely to change. I can see a massive crash coming in London property that will have knock on effects particularly in the South East.

Historically we're a nation of renters. I suspect what will happen is that grandparents will move in with families or live somewhere cheap and hope the pension covers it.

Don't forget that people used to work somewhere for forty years and earn a pension in that time. Or that people used to work until they died or inherited money.

The real problem is that salaries have actually gone down in some jobs whilst house prices have tripled. People can't afford to eat or pay bills and rent because salaries are actually ridiculously low by comparison.

In 2003, someone with a PhD could expect a salary of £25-35K and to buy a terrace was £125K for example. Now to buy a terrace is £350-400K but that PhD will probably be earning £20-27K and not £60K...

This is a fair point, depending on how big that area is and what ties them there. I rented for many years (and now part-own) in Essex. Can’t afford to buy here, can’t move because a) we have vulnerable relatives here who need us close, b) I have Crohn’s and am scared of moving to a different hospital and losing funding for my treatment and c) my partner’s business is here,

I know this isn't the point of the thread, which I've only skimmed over, but I'd like to offer you some possible advice. With apologies if it's irrelevant.

Would your parents be able to be guarantors for a guarantor mortgage for you?

The things is, nobody is entitled to live in an expensive area. When people insist on living in London, it's like insisting on driving an expensive sports car when you can only afford a Ford Fiesta.

Wanting to not be forced out of your home in your own hometown, where all your family and friends are, where your family has lived for generations, is absolutely not like wanting to drive a sports car! That's a ludicrous comparison.

Ditto, wanting to live in the only area where your specific career/job exists, and not be forced to abandon your entire career and get a new entry level job in a new industry for a fraction of your current salary just for the dubious dream of owning some shitty house.

Let's get real here: smaller towns are pretty insular and a lot of them have high unemployment. If anyone knows of any small towns just bursting with friendly people who just love to befriend mentally ill disabled strange women, eligible people looking to get married, and well-paid arts jobs with tons of freedom, by all means point them out.

As for changing career, to me, it seems ludicrous to stick to a career that you can only do in one tiny area of the country - and an area that you can't actually afford to live in! Why would you do that? What's the point in sticking to a career path that doesn't enable you buy a home? People change careers all the time. Most people have some transferable skills.

I have an extremely elite career which I've spent decades training for and working towards, and which will likely make me a very high earner in the future. The perks I get right now are extraordinary and there's realistically no other career that would allow me the kind of freedom I need to accommodate my physical disabilities and mental illnesses. I'm really supposed to give all that up, for what? Some shitty office job or work in a supermarket at a fraction of my current salary?

Besides, once you've built up equality, you can always move back to London with a healthy deposit.

Did you miss where I said I've got £90k saved up for a deposit, I'm just not eligible for a mortgage?

I earn a decent salary, with the strong possibility of that salary becoming extremely high in the future.

I assume I'll work until I drop dead (my industry is one people generally don't retire from - it's the norm in my industry for people to work till well into their 80s or even 90s).

I don't care about the money, I just care about the fact renters don't really have any rights. I'm perfectly happy to pay rent and I can afford it (if I couldn't, I just go rent a one-bed or a studio in London), I just am worried about the physical demands of having to put every item I own into a box every 12-24 months. I've had to move three times in the past four years and it's incredibly physically stressful. I don't know if my body will physically be able to do that when I'm elderly. Plus the stress of knowing that at any moment you might have to drop all your work commitments and travel commitments to find a new flat.

In other countries, tenants often stay in the same rented property for years and sometimes decades, because they have strong renter protection.

We are moving into a corporate feudal system.

Exactly. But of course it's all the fault of those nasty entitled people having the audacity to want to checks notes not be kicked out of their hometowns, and not be forced to abandon their careers.

I earn a decent salary, with the strong possibility of that salary becoming extremely high in the future
What makes you ineligible for a mortgage?

Genuine question, why can't you buy a property.

I'm technically a freelancer but have multiple contracts with different employers across three technically separate industries, and the bulk of my income isn't in the form of a monthly salary (but instead I might get a lump sum that covers like a year or six months' work). Some of my income is in sales, which can't be predicted ahead of time.

I always have the ability to make money since I have skills I can charge a lot of money for should I need to (but I don't generally need to fall back on that very much), but I don't have the capacity to pull out a nice neat employment contract stating I earn x per month.

Because of Covid, I haven't got the required number of years of self-employment tax returns. And until last year I was making half my income from freelance work and half from non-freelance so from a mortgage providers' pov I can't prove income. Since you either need an employment contract showing you earn a set amount per month, or something like 3-4 years' worth of self-employment tax returns. If you earn a good income but from various different jobs and you have a mixture of salaried jobs and freelance jobs, then you're pretty much shafted.

It's a pretty common problem in my industry.

Your rent is £2585?! Where do you live?! That is shocking. I pay £480 for a 2 bedroom house...

She lives in London and rent is probably cheaper than mortgage for the equivalent property. It's on BBC that rents are cheaper than mortgages now (10% deposit) in London and the SE. It certainly is for me (2 bed flat in zone 3 London), my mortgage is £1020 but will rise to £1500 next year (reality is that I have been overpaying £1200 per month the past year to actually pay back the principal). If you think about it, the equivalent rent is £1600-1800 and I have to pay service charge and maintenance for it so it is definitely cheaper to pay rent... Has been the case for me in the past few years.

I had a 15% deposit. We were talking about to an estate agent and she agreed with us, rent is cheaper. And the thing is London flat prices have been stagnant since 2016 so in some parts have actually fallen 24% in real terms. If they fall even more it would be an actual crash peak to trough..when you compare my flat price from 2003 it's 17% more than inflation, steep but not hugely so..the real missing puzzle piece in this conundrum is wages. Wages have been falling in real terms for 20 years which is why we find it expensive to buy or rent esp for small entry level flats like mine. Low interest rates help mask the reality but now regardless of whether we rent or buy, we truly understand our low earning power. It is particularly acute in London because London is a global city where the wealth from the economic growth in other countries is concentrated. So we are more aware of the divide now that the era of low interest rates is over.

What do you think should happen to inheritance? Should it be divided out among the population or disappear into the government's coffers? What about people who win fortunes in lotteries - should they share it with everyone else? Is that what you would do?

The bitterness towards anyone who inherits on MN is not something I have ever encountered in real life. We might look on with a touch of envy, but that's it.

*FutureThroughLensOfThePast ·20/08/2023 08:37

The current generation of homeowners will eventually die off and if no one can afford to buy their empty houses, the prices will drop until they do become affordable*

But people will buy the houses. House buying and selling is a global industry and there will always be someone who buys a place if the price is right.

Also as a baby Boomer you could be waiting another 50 years before we all die off

Agree with a pp, we'll go to the poor house! Basically places that look like care homes without care staff. They'll be run like homeless hostels, twin/shared rooms, and paid for by the government.

I don’t think we will revert to these, they were very expensive to run and staff and certainly where I live they favoured the few who could afford the service charges etc.
Housing Associations took over the Council housing stock here.

Also as a baby Boomer you could be waiting another 50 years before we all die off

The youngest boomers are now 58. The majority of us will be gone in 30 years, there will be a glut of houses on the market as we all die off.

As this is anonymous, would you tell us the rough value of your parents home and savings, and how many siblings would be likely to share it when your parents pass away? This is a significant factor in your argument (subject to erosion for care costs).
All the homes that are privately owned now, and savings and possessions, will one day be inherited by the owners' families... There will be a massive cascading of wealth for a lot of people currently feeling left out. I have remortgaged my home to release capital to allow my children to purchase their first homes. I'm not wealthy! But I'm doing what I can. Many people would not want to do that for their children, preferring their own holidays, new cars and lifestyle. My husband and i never inherited anything (nor will we) but as I bought property in 1995 I have benefited from house price rises. I'm using that advantage to help my children.
I suspect the haves and have nots situation will be massively exacerbated in the next 20 years as some millennials will find themselves with very large amounts of money, which may come with issues of its own...

When people defend their need to stay in an expensive area, due to families, connections …. Should the Government fund this choice in retirement? So people can have their Freedom Passes, no need for private transport or rural transport options and expensive rents paid?

we are a family who moved to a cheaper, less desirable area - no free or subsidised transport until retirement, much lower salaries, nowhere near family. However, we will own our small home with a small garden and not need the government to pay our housing. Zero chance of any inheritances and small pension/s due to income.

I try not to think about it.
My back up plan is being sent to prison.

Why would it happen all at once? Lots of them may downsize before they fall off their perch. That will be a far more gradual influx to the market, I can't really see a glut at any point.

Apparently that’s a real problem in Japan where elderly people repeatedly shoplift or other petty crimes to get themselves sent to prison.https://www.reuters.com/article/us-japan-ageing-prisons-idUSKCN1GQ0AL

It’s going to happen over a period of about 25 years.

God if only this was far-fetched.

It's something that I think about a lot. Even if people want to work until they drop down dead, we'll generally need someone to employ us and we have little control over our health and when that will slow us down.

Unfortunately, I think there will be even greater inequalities between people depending on whether you have inherited from the generations who were lucky enough to be born when there was a sane relationship between house prices and salaries.