there's never been a worse time to be young and British, your screwed if your under 30

[lhldn]

OK the title is taken from a torygraph article, but I do find myself agreeing with it and being sad for the next generation.
www.telegraph.co.uk/men/thinking-man/11231796/If-youre-under-30-bad-luck.-Youre-screwed.html
We’re all becoming depressingly familiar with the results of these policies. The single worst (and most easily grasped) problem is housing. Our housing market has become an in-and-out club. If you’re over 50, in addition to your primary residence, you may well own a couple of buy-to-lets which will augment your already well-upholstered pension. If you’re under 30, you’re screwed.

If you’re under 30 in London, you’re super-screwed. You’ll be in your 40s before you’ve saved enough to buy a dump in Catford. And even then it’s likely that you’ll be outbid by a buy-to-let investor or, increasingly and tragically, refused a mortgage because you’re too old.

A long list of policies across three very different governments has got us here. The “one off” sale of council houses to make us all Tories in the 1980s - over two million homes that went cheap, often criminally cheap. The bottom three rungs cut off the ladder, the proceeds pocketed and the houses never replaced. Even so, property was still cheap back then – and if the housing market was anything like a free market, we might still be alright.

However, for all their devotion to the free market, our leaders have shown no interest in allowing the housing market to function this way. Rather, each year, we build a tiny fraction of what is needed ensuring prices march endlessly upwards. We have no coherent national housing plan. Our planning system is a mess. We have artificially low interest rates. We sell homes off-plan to foreign investors and don’t build enough to house the immigrants who are vital to our economy. The result is an cruelly dysfunctional market – and one which works brilliantly for your parents.

In tandem with this, over the last few years we’ve done a great job of increasing the wage gap between age groups. Guess who low wages hurt? Not people in their 50s and 60s. In fact, they actually help older people as they as more likely to be investors and employers. So, there’s no house for you, but the people who vote can afford a cleaner for their holiday home.

Housing is the most pressing problem

I wonder if people are prepared to move around as much as people did in the past to find a job?

sickoffrozen We are living longer but at a worse quality of life. You will end up having to sell up to get care that isn't by violent numpties as your pension probably wont cover it and your property seized by the care home/local authority.

iggly2 - thats how it is as the moment, i assumed you meant it should be on all property once its sold and i guess not re-invested

The rules for CGT are if you exchanged contracts for the sale of the property on or after 6 April 2014 then 18mths is the maximum that the property cannot be a main residence without being exempt.
This measure will not have effect where contracts for the sale of the property are exchanged on or before 5 April 2014 and completed on or before 5 April 2015.

I think the idea that another poster came up with was that it should be payable on primary residences. Could be onto something good.

I actually think young people move a lot more than previous generations. And they do a lot more voluntary work at uni, while also working a job, And they care a lot more about their academic results. They drink less, smoke less, and take fewer drugs. In fact, in many cases they are so damn terrified of how awful their prospects are that they aren't able to take risks at all.

The idea that you can somehow find your way out of a generational gap in wealth with hard graft is the kind of corrosive myth that overprivileged older generations come up with to deny the reality of economics. I have been shocked by the number of parents who are critical of their own offspring for not getting a job, despite the fact that these youngsters are applying dozens and dozens of times and getting the knock back. People are far too ready to ascribe their own success to their personal characteristics (the arrogance!) and not to the vagaries of history and economics. Other things that annoy me: treating exceptional cases as the rule ('Well X got a job in a corporate law firm'), ignoring the class-basis of wealth ('Y has a house', even though it was financed by Y's parents), using networks to get on (nepotism, internships).

We are fast moving towards a culture in which we race to the bottom in terms of working conditions, accepting more and more crap for the sake of just having a job. It needs to stop, now, and we should start by ensuring that our own kids have half a chance. Looking after them is looking after everyone.

Moniker That is def the case here in rural Scotland, the factories which employed skilled people in the 70s, and their managerial staff, have gone, been swallowed up by bigger concerns. The upshot is that anyone looking for a well paid job has no option but to look in the cities where the high priced housing is.

Blame our planning system. Out of town shopping centres, zoning leading to big new developments selling for mega bucks, awful transport infrastructure to link them up, dismal levels of self build. You have to wonder whether theres kick backs for local authorities in it too.

Iggly Lawyers generally accept most people walking through their door (naturally they can refuse to take on a case where a client has been shown to be dishonest)

Absolutely they do not. We get so many idiotic enquiries that we actually train the receptionists to sort through them and dissuade them from giving us business. We generally don't take on court work without a reasonable chance of success. You won't get legal aid for a court case unless its reasonably likely to be successful either. I don't do family work any more, but I inwardly groan at people who pay for expensive legal battles with the aim of getting one over each other, rather than a workable outcome. If only they would sort it out between themselves. Lawyers do not have a duty to find out whether their clients are telling the truth but to act in the client's best interests and follow their instructions. Its patently obvious from the way you write that you have an obsession about lawyers and I have to say that anyone displaying those sort of characteristics would have the firm I work for avoiding taking you on as a client. Some work is just not worth the hassle of doing. Quite a lot, actually.

I disagree OP. The under 30s are a generation with unprecedented opportunity.

Every generation faces pluses and minuses. People who were young in 1914 or 1940 were "screwed" and that didn't change just because they could have bought cheap housing IF they survived.

The rest of us just have to make the best go at life that we can. We need to keep chinsup and get on with it and stop moaning about it.

CGT on primary residences is a crazy idea. So basically once you did manage to buy a house you'd be stuck there and unable to move to a larger property if for example you had children since you'd be paying tax on your equity and it would therefore be a much smaller stake for you to invest in a new home.

Completely unworkable and we'd have hundred of threads complaining about how people were stuck trying to live with 3 DCs in a 1 bed flat.

Ha, Downtheroad - your complete denial of history is amazing. To suggest that its just even-stevens between the opportunities afforded to the generation that fought WW2 and the boomers is lunacy.

I heard a great quote recently: 'The difference between generations can be summarised thus: the greatest generation sacrificed their future for other people. The boomer generation ask other people to sacrifice their futures for them.'

That isn't what downtheroad said at all. She/he said that the OP's statement isn't correct (and she was right)

She said nothing about baby boomers. She was talking about the young British now and how they are very lucky in comparison.

Yanbu. The future is terrifying. I work hard to stand still. I can pay my mortgage as I bought a house ten years ago thankfully. If I were buying now I'd be lucky to get a shed in London. Time they stopped foreign buyers.

increased property tax would act to cool house prices, that could be cgt, land tax, or an extension of council tax which effectively reforms it into a land and property value tax

Current policies have combined to push prices upwards, we need policies to bring them down to a realistic level.

If the correction is done gradually it could be manageable.
if some other events in the world economy force interest rates up then a crash would be far more disruptive.
We'd have mass defaults and repossessions, many many people in negative equity, landlords raising rents to cover their increased mortgage payments.

We need to shift the way we think about housing, stop seeing it as a way to make a profit

Me and my partner are both under 30 and have a mortgage on a 3 bed semi so it's not all doom and gloom. I live in a fairly expensive area to buy too.

In 34 and graduated in 2002. I had a great job lined up and I was laid off before I started. I managed to get 6 months of work experience which was free as I was given my first year salary when I lost my job. Truthfully I have never recovered because it was 2006 before graduate schemes open up to non-Oxbridge graduates. I made a good income by working 3 jobs. Today two of those jobs are minimum wage jobs where I was paid good money.

I left England and don't think I will be going back. If we return to Europe it would be to Denmark. DH has been with the same employer since school. He doesn't have a final salary pension but those working in Denmark do.

I think the reality is that many more of my generation have left the country and won't be coming back. It's too hard to look after yourself in England.

Honestly, comments about taxes leave me angry. We have too many taxes in the uk that are levied against only one group. Foreigners not paying income taxes on their worldwide income should not be allowed to buy property. The BTL market needs to be flattened in that primary owners should be able to deduct mortgage interest or BTL's should be paying income tax on the gross rental income.

Families are so poorly provided for it is a joke. Our politicians are hopeless and due to the way the media operates very few good people are willing to put their family through the publicity that would follow if they stood for election. It's all very sad.

I think its really hard for the younger ones now.I think the hardest thing is trying to have any sort of independence.

But I don't think its never been worse.I was long term unemployed in the 80's.My housing benefit had been capped so I was behind with the rent.Where I lived had fleas in the mattress,damp,bare wires sticking out of the walls,and no electric for weeks on end when I couldn't afford to put any on the key meter.I used to not eat for a couple of days every fortnight because I couldn't make my giro last.And my method of transport was hitching.
I've never achieved home ownership.

On the plus side though,at 17 I could leave home and claim dole.I could claim housing.And Uni students could get full grants and paid no tuition fees.

I feel sorry for kids now that even if they get a job,they can't afford to leave home/ run a car.

Its really really tough.

Atticus, you only be paying "some" tax on the increase in value of your house.

If the rate were 28%, you'd keep 72% of the unearned, free money.

As everyone else looking to trade up would be in the same boat, that house would be likely to be a bit cheaper.

Condsider two couples: Couple A has a deposit of 10k from an inheritance, couple B doesn't. A buys a 100k flat, B has to rent the same sort of flat.

Both have the same income and spending. After 10 years, A has (say) paid off 40k of the mortgage. B's rent was slightly higher so B has saved £35k.

Meanwhile, the flat is now worth £200k. Both couples want a house costing £300k and B has just received a £10k inheritance.

Under the present system "A" will need to borrow £150k. "B" who has earned and inherited just as much and spent the same on holidays / iPads etc etc will need to borrow £255k. Having the 10k at the right time has made "A" £105k richer than "B".

If CGT applied to main residences, "A" would pay £28k on the £100k profit from the flat and if nothing else changed would then need to find £178k to get the house. From your reasoning I should feel sorry for "A" being trapped.

In this example, even after applying CGT to "A"'s flat sale profits, "B" would still be £77k worse off.

In practice, I think the house and flat would achieve lower prices in a world with CGT on main residences and so the gap between "A's" and "B's" of this world would reduce further which would address the issues of the thread.

To answer the OP, the young have had it worse in absolute terms in lots of other eras - generally due to wars.

However, the old have never been as rich compared to the working population and this is the first time in centuries where a generation has handed their children a worse position than that they received. So relatively speaking the young are in a worse position IYSWIM.

How about couple A saved up their £10k through being careful with their nmoney and then bought a property whereas couple B spend all their spare cash?

The "justice" in your example only works if you start with the premise that couple A have received an inheritance (which is seemingly some sort of crime) and have used it sensibly to buy property.

Quite honestly who gets an inheritance in their 20s? Most in their 20s will have two living parents for quite some time. The only people I know who have had inheritance money have had it in their late 50s/60s when their parents die and most people who receive an inheritance I'm sure would far rather have had a more time with their parents and no inheritance.

I'm simply saying that if there was capital gains tax on primary residences it would create different problems and would see some trapped for much longer in homes that are too small for their families. Most homes don't go up from 100k to 200k as in your example. They might go up £10k in which case losing 28 percent of that increase is a relatively big chunk.

It might ultimately have a cooling effect. Or it might mean that, in the short term at least, nobody can afford to sell. Creating shortage in the market and price rises.

I'm sure the treasury would be delighted though. Would help with the trillions of pounds of debt we have that everyone seem to forget about.

ThatB is right that there were a load of people in the early 80s who couldn't get jobs, a massive generation of graduates who due to a recession at that stage could not either. I was just about top of my year at university with prizes and even I had to apply for 115 before getting one. It was very very tough.

As for suggestions that OAPs/boomers had it made - manyo f those fought for this country. They suffered much more than any of us have, bombs rained down on them in the UK and they lost limbs and relatives and were wrenched from parents' arms for 3 years to live with strangers in Wales when sent away from towns for thei protection and did not see their fathers for 5 years who came home so emotionally damaged in many cases they could not be proper parents. Then they had rationing and national service. Tat was not some golden lovely cheap time. It was an awful thing they endured to ensure we spoilt people of today enjoy luxuries of which they could only dream.

I am not however saying things are easy now. Each generation has its difficulties.

No political party will put CGT on private houses although whoever wins next year's election is going to have to make massive cuts all round of the kind we have never seen before as the deficit remains huge and even when that goes we have a huge national debt. Things like protecting the old, education and the NHS from cuts will not be possible for either the Tories or Labour. It is going to be very tough. If interest rates rise - they could double - plenty of people could see the interest element on their mortgage doubling too which won't be much fun.

The interest rate rises will probably do it and they will come eventually because current levels are simply not sustainable. I know a few people who will really struggle if base rate goes up to a more normal 5-6 percent which is closer to historical average. The problem with that of course is that many will lose their homes.

House prices will stop rising so rapidly though.

Boomers did not fight in the war! Some of the arguments on this thread are absurd.

Young people have a lifetime of working to look forward to with ever rising taxes and little hope of buying a property. Where as many boomers will spend 20-30 years supported by tax payers and happy grabbing they feel entitled to like bus passes and winter fuel allowance even if they don't need them and other people in society are desperate for these.

Having worked in housing in London:-

I agree that houses were sold off but there are now 5 million people on housing lists so 3 million people more than the houses that were sold off! Immigration has played a huge part in rising house prices. Second homes and "investment" flats and houses have also inflated the market! We do actually need politicians to actually tackle these issues. Immigration - can't / won't because they don't want to be seen as racist and can't control euro borders. Second homes can't/ won't because it would hit a lot if middle class core voters. Investors - can't / won't as it would hit city of London. It is the people with powers interest to keep house prices high and that's why Labour encouraged immigration/ buy to let / foreign investors, because it made everyone feel good when house prices kept going up! Under 30's need a revolution, they won't though because they've all been brainwashed.

Actually I think a lot of under 35s who could start a revolution have left the country. I am shocked at the volume of middle to upper middle class families living in the New York metro area. I went to a good school where 1/3rd went on to Oxbridge and everyone else went to a red brick. More than 50% of us now live abroad as there haven't been the opportunities to progress in the UK or afford a family.

The problem is that the common shout is that it's all the fault of the conservatives. It really wasn't you know. The Labour government "caused" much of this mess with house prices.

mshanj what is the obsession with the baby boom generation? The PP clearly said "OAPs/boomers"

What are the dates of the boomers? I assumed people meant my parents' generation who were teenagers during WWII and then had those awful 1950s years of rationing and national service and the like. if we mean people who were born later surely they suffered the 3 day weeks in the 70s, 60% inflation which ruined their savings, income tax rates up to 99%, power cuts, strikes - an awful time.

I don't agree people have to move more now. In the 1920s my grandmother took a ship to India to work as a nanny. In the 1800s other relatives escaped the Irish potato famine and moved to England for work/food. In the 1930s my grandfather's 3 brothers went to the US/ Canada as there was hardly food in the UK although they ended up sleeping rough, never married and had an awful time in the depression. In the 1960s my uncle moved to Tasmania and my parents nearly to the Solomon Islands. People have always had to move for work. My siblings and I a generation later moved hundreds of miles for work with the result no family were around to help with children. People have always had to move for work.

Much of the country has not had huge price rises at all. Where I am from prices have risen 10% in 10 years. Even here in outer London we had a good few years of no rises. Most people are not living as my grandfather did in 1901 however in a boarding house with 26 other young men. We all live in clover compared to those times.

Handosff77 I can't think of a better way to drive out the motivated and hard working young professionals, ie the ones you need to pay taxes for today's young and old, than CGT on main residences. It would make the UK just about the most unfair place to live for that group in the EU, possibly the developed world. Why the hell would anyone want to go on living here when you have so few other chances? The only bright spot is maybe making money out of your own home, if you are clever, and careful.

Theres a limit as to how much you can punish people with tax. Taxing people at 40% (50% once you include NI) on their income already creates a massive disincentive to taking that promotion for a harder, slightly better paid job, because you will only get half of any salary rise, or maybe the cost of a sandwich and a coke spread over a year.

Taxing people twice on income already paid to purchase their own home is utterly ridiculous. And unworkable - it would cause a revolution. Or a mass exodus. Take your pick. The UK is such a depressing country and so crappy in most other ways, it would hardly be worth living at all then.

Atticus Quite honestly who gets an inheritance in their 20s?

You would be surprised if you had ever worked for a semi rural firm with a lot of clients who have already inherited/farmers/landowners - I regularly saw deposits being funded to the tune of 250k by a bung (not an inheritance) from doting parents. Very, very common. No need to wait on an inheritance.