A generation waiting to inherit

[Okaydoklay]

With house prices being so high, are we creating a generation of people who home ownership is out of their grasp, and those who have wealthier parents , they are all waiting for their parents to pass to ever be able to afford their own home.

My OH's nan sadly passed away just over a year ago. He was left a portion of her estate which we will be using for a house deposit. If we weren't coming into that money we wouldn't be able to buy a home. Obviously we would trade that in a heartbeat to have her back but in answer to your question, my family is certainly one where inheritance is the only feesable way of getting together a deposit. Currently anyway.

Actually the situation for millenials is worse than this - even for those who are able to scrape their way onto the property ladder. The boomer generation benefited from the large house price inflation that occurred when the banks increased their lending thresholds to joint income (rather than 3x the first income plus 1x the second). This means that now both parents need to be in good jobs to even think of getting on the housing ladder (or - because rent and house prices are linked as investors want a return on capital - to rent a half decent property). That means that both parents need to work when the children are small and are stymied by the costs of childcare. (Plus any student loan that needs to be paid off as a consequence of having a decently paid job).

Then those that are hoping to inherit will probably be disappointed due to costs of long term care requiring homes to be sold and the depletion of that capital.

So they are basically screwed over whichever way you look at it.

Babdoc - I would do the same for my children.
I don't want to inherit money at 60. I want to have a family home for my kids now (early 40's) At 60 I would look at downsizing and helping my kids.

My mother's care is costing 1500 a week. Modern medicine means she will live with dementia for years and years. it will all be gone.

The only way to inherit money now is for someone to die young. People who live to a fair age spend all their money on care fees.
What a waste of a life to be waiting for an inheritance that is likely to never arrive!

With changes to life expectancy, it would make more sense for grandchildren to inherit. This is the generation to introduce the stepchange: many people in their late 40s/50s had the benefit of lower house prices.

but is rubbing his hands at inheriting from his parents Nice bloke...
But I've seen this so many times and it hasn't worked out as the prospective inheritee hopes.

To clarify, I think too many people are relying on inheritance, when I agree , most of it will be needed for care.

I'm early 50s and by the time the dust has settled in 6 months or so, I will have inherited about £300k from my late H and my late DM. Damn right I will make sure my DDs get house deposits. And I don't actually mind being taxed on those gifts, I know I'm privileged to have that kind of money.

Glad to see that @SilverySurfer is here to tell us that if they all jettisoned their expensive lifestyles they could all afford to buy a property. Where I live you wouldn't get much change from £350k to buy a 1 bed flat on a 70+ year lease.

We don't have any money but a house all paid for.
Luckily our dc have been ok and were on the property ladder quite easy as it's cheap up north. 145K buys you a lovely 3 bed semi in a nice area.
They lived with us until about 24 in each case and then bought their own places, DC no 2 and partner are house hunting now, in that price bracket.

I think if you want this type of house or more than a flat in expensive areas it is more of a struggle. He has had no life since being 16 though, every penny has been saved for a deposit.

Sometimes the standard of life they have and the outgoings is what prevents getting on property ladder, not just the price and wages.

Inheritance tax is meant to level the field. These schemes will never touch the truly rich, only the middle middle class. I don’t agree that children shouldn’t be able to inherit. It seems punitive to those who have saved and made wise decisions.

I actually know someone who was waiting for an inheritance. Her grandfather was very ill at the time and she was telling everyone that it will be okay when he dies because he is getting some money from him and may use it to buy a house (she was only about 20 at the time, single, no children and still living at home so saving to buy was not impossible).

I would rather have the family member than the inheritance and we tell our DPs to enjoy their money whilst they can, but then DH and I were able to save and buy our own houses so are not in the position of renting.

I don't know anyone waiting, my kids generation (early 20's) aren't working yet but most have home owning grandparents so they may get lucky, or their grandparents may get dementia... My kids know they need to save up £30-50k to buy a house, some of their friends are well on the way by living at home and not spending frivolously, even a recent graduate in a full time job can save £10k a year unless they are forced to leave home

I'm end of the boomers and not hanging onto our wealth. We already gifted oldest son money for his downpayment and helped renovate the house and it's lovely.
We have the same waiting for 2nd Ds. By the time Dd is ready we will be or will have already downsized and will do the same again. My mother is still alive and living in her own property (she downsized too) My sis will inherit Dm's flat as we got a discount on buying the family house years ago.
I really don't understand people my age and older who have no interest him helping out their grown children in getting on the property ladder, and would rather see them rent long term than help at all.

We're not going to inherit much if all our parents avoid care homes. If we die when we're elderly and actually have some equity it will be quite a late inheritance for our children, they're a date to plan on using that for a deposit. I wish it was different.

That is unlikely to happen now - that money will go to fund care homes

I believe the majority old people never go into a care home.

On care fees, if you were to help your DC by downsizing, would that mean they could take that back for the care fees, or would it just be the property you downsize to? It all seems so complicated. I would like to help them in future, possibly by moving somewhere less expensive, but don't want them to have to worry about giving it up to pay for any care fees (would rather go to dignitas than that)

On people waiting, I do know of a family private renting, high costs while their mother is elderly and extremely wealthy. (had a massive life insurance payment and huge property also which she has downsized from) I don;t understand why in that position she doesn't help them. But it seems not to be the 'done thing' for some reason. I would.

Thatcher encouraged us all to be home-owners at about the same time the dementia wards were closed.

I live in a rural area. Most of the farms around here are not occupied by farmers, in that the actual farming is contracted out, but by landowners who seem to have had no discernible career or jobs in the past, but have inherited the money to buy said farms. Or theres a few country estates types too, same thing. This also has the advantage of being inline for that other great wealth creator in modern day Britain, selling your land for housing.

When I worked in conveyancing, I used to wonder who on earth bought those over-priced two bedroom new build city centre flats. And then I got several children of farmers who had sold land for housing in a row, all being bought their luxury flats at the age of 17or 18, plasma screen tv and other toys included in the purchase price.

Give me buy-to-letters any day. At least they put a bit of work in.

I’m really not a Tory but it’s exasperating the number of women on MN wondering if they can afford a third child or whether to keep a pregnancy at 17....these are their decisions to make but don’t ask me to give up my taxable inheritance or not provide for my relatives when I die.

The pil galloped through £650K (their house and savings) as both lived with dementia for quite a few years and required care.

Otoh friend of mine has just inherited £1.5m as her dm died suddenly (at 80, so not tragically young); the house only had 3 beds but it was in a posh bit of outer London.

Inheritance is a lottery and with the increase in home owning in the last few years will make social mobility worse - not so much class based now as area based.

More people are needing care as living longer but yes I too read most of us don't need residential care. A minority too (although some others might need some care at home which is cheaper)

My grandad spent £50k in premium bonds on a woman the same age as me. My Mum was absolutely furious.

On the subject of pensioners downsizing: my parents bought a small bungalow, it was ideal for about a decade. Now one of them is in bad health and needs various disability aids there's no room! Even just the incontinence supplies need a large storage space (three months worth delivered at a time, you can't request just one month).