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?

Between stamp duty, removal costs and costs to make any new house your home it’s extortionately expensive to move.

We did it and that's not our experience. We sold a 4bed 2 bath 2 reception house and bought a beautiful little gem, 2 bed 2 bath one large reception in a fabulous location The total legal tax and removal expenses were a trivial fraction of the profit we made. For 50 years we have DIY'd our way UP the housing market; installed our own kitchens bathrooms total wood-strip/redecoration etc; all our own work and sweated labour. Often took years.
No more. In this place we pay excellent contractors to do everything.
(They have to be excellent because we have very high standards).

Our heating and maintenance bills are tiny compared to the last place.

Infinitemoon you must live on my estate!
DH and I - both in our 60s, both fit - would love to downsize, but we want the impossible. Struggling to find a plot to build our own.
Surrounded by family homes, many occupied by couples 10 or more years older than us, or elderly single men. Walking distance to a good school. These are perfect family homes: we bought when DCs were 4.5 and 1.5 and it's served us well. We'd love it to be a family home again.

OP if you are London then you must realise that lots of the boomer generation have their adult children living with them?

I've got 3 siblings, a CM and know other people with their adult children living with them. All the children are millennials.

Some of the children are in their last years of university, others are doing postgraduate degrees, others are starting out in their careers and even more are just living at home while they save for a place of their own.

In fact the only sibling I who has sold up and brought a smaller property lives outside London.

I do see near me and them, houses with very old people in them. However if they went into care homes there is absolutely no guarantee their homes would be sold. In many cases it makes sense to do the house up and rent it out to pay care home fees.

It might not be a 'generational bashing thread' but it's still the same 'why are widowed people living in 5 bedroomed houses with big gardens' stuff

How dare older people stay in their own homes when there's someone younger who thinks they are more entitled to it?

I wish they would, my parents are boomers in a house too big for them that they can't stay on top of and it stresses me out thinking that at some point it's going to be my problem. Trouble is they've got nowhere to downsize to, all the local 2.5 beds with a decent garden have been extended in to 5 bed monstrosities. So frustrating.

I think it's begun. Im seeing a huge amount of larger houses that haven't been touched since the 80s come on the market.

Certainly my parents friends have started downsizing, and a few did so once the youngest was out. Some of these were less obviously a downsize I.e. large house in countryside to slightly less large house on a bus route.

@2bazookas

Clearly there will be more profit if you bought 50 years ago. I don't think millennials in the North will make such proffit in the next 30 - 50 years. House prices can only go up so much beFore they become completely unaffordable.

@WellNotReally

It might not be a 'generational bashing thread' but it's still the same 'why are widowed people living in 5 bedroomed houses with big gardens' stuff

How dare older people stay in their own homes when there's someone younger who thinks they are more entitled to it?

Exactly Bloody hate these threads

My parents nearly downsized in their 70s. Thank goodness they didn’t. Their heart wasn’t in it but they went to see flats for some reason.

Why anyone shouldn’t stay in a home they love is beyond me. Race to the bottom still going on I guess.

I agree a lot of people wait too long to move. A significant number of houses I see coming on the market here are clearly being sold due to the death/move into care home of the owner and are very run down and outdated, best suited to being bought by developers as they need completely redoing. I appreciate people want to stay in their homes but it’s sad to see the conditions people end up living in, not to mention things you can’t see like outdated electrics etc. I think stamp duty should be cut for pensioners downsizing to avoid this disincentive.

Interesting discussion. I think partly because downsizing is seen as a negative and that you lose more than you gain. That might change with the cost of living increases. Not just utilities, but the expensive and faff of getting trades to do regular maintenance etc.

Agree that many older people miss the window of opportunity and it ends up in the too difficult box. I work in health and see again and again how things get to critical point because people are living in houses that are no longer right for them. The incremental impact of too large, too cold, not maintained catches people almost unaware. The epidemic of loneliness amongst frail, older people is also exacerbated by this.

I’m 52 and DD is 17 and I’m looking at downsizing to a new build three bed semi in the next year or two. Partly as others have said, I’m active and want to reduce my need to work so hard and want somewhere I can lock and leave to go travelling.

There is one massive reason to stay: your home is your home regardless of practicalities. There is one massive reason to sell (IF you haven't already put your property in trust or in your DC names); inheritance tax. I would hate to live in a £2million plus property and for my DH and I to die there, forcing my DC to sell it in order to hand 40% over to the taxman. I would also hate to be asset rich and cash poor. Some of these homes were bought for 90k and are now nudging £3million. I agree with posters up thread who said downsize while you are young enough to. I also think it is good to be young enough to make pals in a new community. My own DM (late 70s) has just moved countries (she has never lived in the UK) and has downsized from a three bed to a city centre pad and is loving her lifestyle. I hope I am still going at her age and I hope I am as open to change as she has been.

DH & I are at the young end of the boomer scale and have been talking about this issue. Looking to either future proof our current 4 bed or move while we are still young enough to do so.
But, the simple fact is that retirement flats are unattractive; having previously lived in a semi, I would rather not do that again, especially as I would be the old person with the tv blaring through the wall, and the dogs barking over the fence, and what I want, a 2 bed bungalow in a pleasant area just does not exist…
I think if we want to resolve the issue we need to get back to building what people want to live in rather than what builders want to cram onto a site.

OP, you should be glad that all us old boomers are NOT selling up and competing with young first time buyers for the limited supply of two bed starter homes! If you added us to all the wannabe ‘buy to let’ landlords and second (holiday) home buyers, the market would be even more impossible for youngsters.
At current prices, very few young families can even afford to move up to a 4 or 5 bed home, even if we boomers vacated them. The UK housing market is a shitshow caused by investment property speculation.
I don’t see any easy answer beyond a massive building program, but modern builds tend to be comparatively poor quality, and few boomers would be tempted out of their solidly built properties to end their days in one.

@EmmaH2022 why would your parents down size to a flat?

The people I know who have actually downsized have downsized to a house with less bedrooms. So from a 4-5 bed to a 2-3 bed.

The people I know who are even older than boomers (so people born before the ending of WW2 in Europe) some of them have downsized to flats. Others have had younger people move in with them.

Oh and @EmmaH2022 some of them have managed to find properties with bigger gardens.

[quote RedWingBoots]@EmmaH2022 why would your parents down size to a flat?

The people I know who have actually downsized have downsized to a house with less bedrooms. So from a 4-5 bed to a 2-3 bed.

The people I know who are even older than boomers (so people born before the ending of WW2 in Europe) some of them have downsized to flats. Others have had younger people move in with them.[/quote]
Oh I just see this as a generic bashing thread, sorry

So strictly speaking, it's like a 3 and a half bed. Mum is 83 and dad would be 84 if still here. So downsizing would have been a flat for them.

It's on a good sized plot though so the rooms are big, though the garden isn't. I just don't understand/get annoyed with all the "one person rattling around" type threads.

After lockdown, I think even more people will be conscious of getting more space. I know I am.

Let's not pretend the OP started this thread because of concern over older people living in houses that are too large to manage if they become frail. That wasn't the premise of the first post at all.

No I never pretended it was the premise @WellNotReally. I don't even pretend I am young. We are solidly middle aged (well maybe even a bit older for my DH). I want to move closer to my DCs' schools. The area is full of big houses but many much older people live there decades after their DC have moved on and out. If I am lucky enough to live that long, I will be one of those people in the next two decades. We have probably left it too late. It is clearly from the post that I am asking for any strategic info on when might we see more family homes on the market from a demographic point of view. I also worry that if we trade up, when the time comes to sell (because I do not harbour ambitions to rattle around in a suburban house after my DC have fled the nest), we may lose money as we would be buying at what seems to be a massive peak. Basically, will the market drop a little due to more houses coming on?

Interesting discussion! In the area I live lots of baby boomers live in large 4 bed houses worth nearly £1m which were built in the 60s and 70s - on fields (housing estates) and yet - what I find frustrating - is that they are very often very vocally and actively against any possible new housing developments near them...but they don't seem to release younger families need homes and that was them 50 years ago. Very tricky

@WellNotReally

Let's not pretend the OP started this thread because of concern over older people living in houses that are too large to manage if they become frail. That wasn't the premise of the first post at all.

Agree it’s all dressed up as concern for older people when it’s just concern for herself.

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?

A lot of Gen Xers benefitted from being able to buy their homes before the prices shot up in the 2000s or earlier. I'm towards the end of Gen X, only five years off being a millenial/Y and have been a homeowner for 20 years.

Y and Z are/will be much more affected.

Sigh @Poorlyplants. Once again, I have stated my motivation pretty clearly. I want to move into my DCs' school area and not have to downsize too much. I also do not want to pay over the odds for a house if prices may come down a bit due to a sudden flurry of stock in the size and shape I want. I do not pretend that this is posted on behalf of older people though I will be one myself before too long.

@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.

Maybe you wouldn't want to be 'rattling around in an empty nest' but perhaps the rest of us enjoy fulfilling busy lives now our children have left, actually like living in our homes, and have done some estate planning.

I don't know the answer but I live in one of these areas/streets.

We only got ours as we were chain free and the couple were divorcing, we put in a strong offer and it is one of the "worse" houses on the road.

The bit that pisses me off (and its free marker economics nothing to do with boomers) is they leave the houses to wreck and ruin with little or no maintenance and they STILL get sold at top whack despite needing 200-300k of work as they are so so so hard to come by and when they finally move can afford to hold out. Properties are frequently on the market for over a year (this is across 2019-2022 )

It's amazing area for schools... but our youngest neighbours are in their 50s with kids in 20s... most are 70+ couples or widows. It's frustrating but what can you do??

The bigger mansions up the road are all bought by developers torn down and turned into flats that look like a single mansion houses, with gym, garages, pool steam and sauna. Not sure who buys them but The flats are 2 or 3 bedroom and sell for a million and up

We downsized a couple of years ago from a 5 bed house to a two bed large flat. We had the flat totally refurbished and bought 90% new (modern) furniture. At our age, 60s this was great fun. In ten years or so, perhaps not so much.

We saw how both sets of parents struggled in houses that were not only two large but had random steps which made life difficult.

Our flat has a larger lounge and a larger kitchen than in our 5 bed house. The views are stunning and we are close to Tube station, bus routes and shops.

We did a big declutter before we moved.