Demographic timebomb and housing

[Salisburyspire]

When do we think babyboomers will begin to sell? This is not a generational bashing thread by the way, am asking from a strategic point of view.

Any economists or demographers out there? I have only seen one UK article on this and it predicted they wouldn’t sell until 2034 onwards. Surely that’s too late? Is there a particular five year period during which we expect there to be a huge downsizing?

When they do sell up, will it leave a glut of large homes on the market? I’m Gen X but very much want to trade up (one last large house). We own our house outright but the next step up in the area near DC schools has exponentially shot up over the last three years. (Leafy London but not too far out). One issue is a massive shortage of decent housing stock in that area. Our plan was always to move there, see the DC through school and then downsize as there doesn’t seem any point to living in a big house without the kids there when we could by then be enjoying a more comfortable retirement and liberating some property cash while not worrying as much about inheritance tax or costs of maintaining a large house and garden.

It seems though that the generation before is not budging. There are widowed people living in enormous five bedrooms homes with huge gardens. They don’t all look to be super wealthy judging by some of the slightly overgrown gardens etc. Yes it’s a wealthy area and yes it’s their right to live wherever they want. However unless all these homes are in a family trust or already signed over, the inheritance tax bill will be enormous.
These are homes in the £2million plus bracket.

If we are lucky enough to buy one of these homes (and stretch ourselves massively) do the demographics work against us if we have to sell in 10-15 years? Won’t that coincide with a glut of large houses so we will have bought at the top of the market and possibly be selling in a downturn?

Will Generation X actually be the riskiest generation to lend to as they don’t have enough working years ahead of them to properly pay down massive mortgages whilst some (not all!!) millennials will inherit property wealth from babyboomer parents?

Should the government reform stamp duty to provide an incentive to downsize? (Yes I know there are not enough quality smaller homes for people used to huge ones in nice areas). Will there ever be a great downsizing shift or is our country not built for it?

Babyboomers covers almost 20 years, I think it is 1946 to 1964 so I can't see everyone deciding to sell at once based on age let alone other considerations.

Why should they move.

I am never leaving my 4 bed home even when the kids leave. This is my home that I spent time and effect getting how I want. Why would I pay stamp duty to live somewhere smaller and start again doing up a house to my standards in 30 years!!

Thank you @ancientgran. The 20 year span is part of my worry too as it suggests that the big sell of will last two decades. At the moment there aren’t enough big homes in the area and a bit of extra space seems to fetch a disproportionate premium (a bit like buying a diamond).

@ancientgran

Babyboomers covers almost 20 years, I think it is 1946 to 1964 so I can't see everyone deciding to sell at once based on age let alone other considerations.

Exactly. My parents are at the older end of the baby boomer scale and I’m at the younger end. My parents may well downsize in the next 10yrs or so, but I’m certainly not planning on it in the same time scale. It will depend on age, health, fitness, personal circumstances etc which will vary greatly across the ‘baby boomers’ group.

You would be better off extending or buying a smaller property with potential to extend.

@LittleMsPerfect

Why should they move.

I am never leaving my 4 bed home even when the kids leave. This is my home that I spent time and effect getting how I want. Why would I pay stamp duty to live somewhere smaller and start again doing up a house to my standards in 30 years!!

Absolutely agree. Between stamp duty, removal costs and costs to make any new house your home it’s extortionately expensive to move. I’m certainly planning to stay in a house big enough to house family until I move into a retirement home.

Yes, there would be a bit of extra maintenance costs for a bigger house but you can always shut doors and turn off radiators in unused bedrooms. I’m fortunate enough to have a large enough pension that I don’t have any need to release capital from my home

No one should have to move @LittleMsPerfect. However some of these homes are dilapidated (while it sounds like you’ve maintained yours). They’re worth over £2million which means many hundreds of thousands going to HMRC when the owner dies. If you were in your 70s and your area carried a premium due to schools which you no longer have a use for, AND you couldn’t afford to maintain a large house and garden, it would make sense to move. I wouldn’t want to be rattling round in an empty nest. Agree it’s too expensive to move though.

I’m a very young boomer, just scraping in. I feel at a very different stage now than I would be in 20 years too, you’re generalising too much.

We have young adult children and will hang on to our largish family home for at least ten years in the event that any of them need to move back home for any reason, and have space for them all to “come home” for Christmas etc. So we won’t be selling for 10/15 years I should imagine. We’re very happy here and only in our 50’s so can easily manage the house and garden.

@ThroughThickAndThin01 I guess I’m meaning the upper end of baby boomers not least as my husband doesn’t sound much younger than you! That’s why I wonder if we have left it too late to trade up ourselves.

@Salisburyspire

No one should have to move *@LittleMsPerfect*. However some of these homes are dilapidated (while it sounds like you’ve maintained yours). They’re worth over £2million which means many hundreds of thousands going to HMRC when the owner dies. If you were in your 70s and your area carried a premium due to schools which you no longer have a use for, AND you couldn’t afford to maintain a large house and garden, it would make sense to move. I wouldn’t want to be rattling round in an empty nest. Agree it’s too expensive to move though.

I think sometimes people just wait too long. I'd love to move. We bought this house from a retired couple and I laughed when she said, "Why should I have to clean 3 toilets in a house where 2 people live." There is truth in it though.

My husband is 7 years older than me and he can't face the upheaval. He is a bit of a hoarder so there would be so much to sort out and I keep telling him that I'm getting older too and soon it will be too much for me but I can't get him to face up to it. So here sits one babyboomer who is being held hostage in a 4 bed house with two bathrooms, downstairs loo, 3 reception rooms and double garage that I would dearly love to leave. A young family would love it but I fear it will only be sold when I'm a widow or we are both dead.

Cheerful thought!

My dad is in the same position as you @ancientgran. He'd love to sell the large 5-bed house he and step-mum live in. It's too big for them, it's expensive to heat, constantly needs expensive maintenance, and the garden is huge and too much for him to do on his own now. But she won't move, because if they do then they won't have room for all the DC and GC to stay (her DC and GC that is, not his!). So he's resigned to being stuck there until one of them dies or both of them end up in a nursing home.

@LittleMsPerfect

Why should they move.

I am never leaving my 4 bed home even when the kids leave. This is my home that I spent time and effect getting how I want. Why would I pay stamp duty to live somewhere smaller and start again doing up a house to my standards in 30 years!!

I'm assuming the op means when you're dead

I've seen articles stating that most "boomers" will be dead/in care by 2035

@zafferana

My dad is in the same position as you *@ancientgran*. He'd love to sell the large 5-bed house he and step-mum live in. It's too big for them, it's expensive to heat, constantly needs expensive maintenance, and the garden is huge and too much for him to do on his own now. But she won't move, because if they do then they won't have room for all the DC and GC to stay (her DC and GC that is, not his!). So he's resigned to being stuck there until one of them dies or both of them end up in a nursing home.

Maybe a wife swap (or husband swap) is the answer.

Our plan was always to move there, see the DC through school and then downsize as there doesn’t seem any point to living in a big house without the kids there when we could by then be enjoying a more comfortable retirement and liberating some property cash while not worrying as much about inheritance tax or costs of maintaining a large house and garden.

I bet you will be in no rush to sell once your DC move out, considering you already have a home which must be adequate for your needs (as opposed to your want for a "last large house"). You just fancy living in a bigger house, and maybe the older generation do too. I hate the thought of you prowling around their streets judging their flaking paintwork and wondering when they will get so frail that they have to sell to you.

A house is someone's home, first and foremost. Why should older people move out of homes they love in order to facilitate your climb up the property ladder and maximise your investments?

It's a bit of a chicken and egg situation. I'm just at the tail end of boomer, my Mum is just outside the other end.
We'd like to be able to sell both our houses and get a bigger one for all of us to live in, keeping room for young adult DC. But we want to move to a different area, which we can't do till DH retires. As his pension has been screwed, he now has to work till 67 (?) in order to retire on a liveable amount, although he has worked for the same organisation since 21, and should have been able to go earlier. The difference between him retiring now and at 67 is about 10k pa, so it would substantially affect our lifestyle if he retired earlier. My pension is minimal, as for most of my working life it wasn't mandatory and we just didn't have spare cash when the DC were young.
So whereas we would have moved ideally a few years ago, we won't now be moving for at least 5 years.
Meanwhile older DC's are finding it really hard to find, let alone afford, somewhere to rent. Anything coming onto the market is snapped up within hours, even getting to view a flat is really difficult.
The whole property market is a shambles. Has been for years really, if

interest rates go up it's going to be even worse .
I notice on other threads that people are paying almost the same mortgage payments now to borrow 2-300,000 what I was paying to borrow 60k 30years ago. We were paying over 1k pm then.
The OP talked in her post about expensive properties in run-down condition - I remember this was pretty much the case in most of the 60s and 70s, most of my friends parents had big (4-5 bedrooms)London houses with draughts, no carpet, and often holes in the roof with buckets to catch the rain! No-one had new furniture, and most seemed to be living a hand-to-mouth existence. The numbers are just bigger now.
The problem has been exacerbated by lack of adequate planning laws - apparently English (British?) new builds have some of the lowest square footage footprints of anywhere in the Western world. Nice big new family homes are few and far between. Most new builds are pokey and mean looking.
I don't know what the answer is.

I don’t think the younger end of the boomer generation will be selling their houses en masse when they reach retirement and beyond, reason being people now live longer, keep themselves fitter and have the money and time to maintain and adapt these large expensive houses, they won’t need to sell to maintain their lifestyle, a boomer can be as young as 57, couple that with there being a total lack of smaller detached houses on decent plots to downsize to, you could be waiting a long time.

Not sure that the 'boomers' are such a huge population that will make any difference. It's not like people hit 65 and suddenly sell up (I'm 60 this year and still have a kid in school)! I certainly don't plan on being dead or in care at 73, thanks @ChiswickFlo wherever you read that is way off the mark.
People like to hold on to houses for boomerang kids or for visiting grandkids.
Having said that, in the US most of my parents' friends did sell up and move from detached houses in the suburbs to city centre flats about the time they retired and their own kids got married. But I haven't seen the same trend here so much.

@Poorlyplants

I don’t think the younger end of the boomer generation will be selling their houses en masse when they reach retirement and beyond, reason being people now live longer, keep themselves fitter and have the money and time to maintain and adapt these large expensive houses, they won’t need to sell to maintain their lifestyle, a boomer can be as young as 57, couple that with there being a total lack of smaller detached houses on decent plots to downsize to, you could be waiting a long time.

I still had one child at university (coming home for holidays) and one doing A levels when I was 57. When DH was 57 we had 2 at school and two at uni. Not much chance of downsizing then.

My parents are boomers. They both still work and my step mum still works. My dad still does triathlons. My step mum and mum both run, cycling and swimming.

They seem very "young" and have young lifestyles.

Can't see them shipping off to a nursing home or downsizing any time soon!!

We're babyboomers (vintage mid 1940s) and so are many of our friends. We all worked , kids gone, now retired, still active. In the last 5 years or so I'd say almost half of us have downsized to a smaller home suited to our future decrepitude. No stairs, walk in/drive in wet room, managed grounds. Closer to services, shops, hospitals, public transport, our adult children, grandchildren. A lock up and leave, so that we could use our free-up assets to carry on exploring the world and new interests (covid interrupted, but we can wait and adapt).

Younger people forget, our generation grew up among huge social changes and opportunities and have spent all our lives recognising and adapting and managing those changes. A whirlwind of new personal finance, education, work, feminism, sexual freedom, medical advances, immigration, race, political turnarounds, technology, world travel. Our lives were about change and we embrace it.

I agree. On our road people tend to live in their house until they die. There are numerous large houses right next to a school with one or two elderly occupants it seems odd that young people can't access these houses tbh.

The problem has been exacerbated by lack of adequate planning laws - apparently English (British?) new builds have some of the lowest square footage footprints of anywhere in the Western world. Nice big new family homes are few and far between. Most new builds are pokey and mean looking.
I don't know what the answer is.

Well the obvious answer to this particular conundrum is to either buy an older house, or to build one with more generously sized rooms. We couldn't find an example of the former that suited us, so did the latter.

I do think a lot of older people wait too long to move though, which is a point @ancientgran made. My DM and stepdad downsized in their 60s to a future-proof house that they build themselves. My DF and stepmum are now in their mid-late 70s and stuck in a big, old, rambling house that is too much for them. Miss that sweet spot for moving and you can easily find yourselves stuck.

Considering the number of 40 year olds divorcing and moving home with parents they probably need the space. My grandparent’s home was always the hub where family came together to celebrate. We couldn’t have done that in anyone else’s home until I was 14 and my parents bought a 5 bed house (having lost money on previous home in the 70s and been made redundant). They didn’t have an easy time of it. In the 80s there were waiting lists for mortgages. I think they’ve earned their right to their homes.