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?

I don’t know why people are so against downsizing. My parents are healthy in there 70s, they could easily manage a bigger house if they wanted to, but in their late 60s they sold our old family home for a ground floor flat with gardener and concierge. Before covid it meant they could travel without worrying about maintenance or security. It’s plenty big enough to host meals and it’s in an area with loads of b&bs so they don’t need guest bedrooms.
Dh and I plan to follow suit but not till our dc are fully fledged.

It’s this failure to acknowledge as a generation how lucky they were in regards to property/jobs/finances that makes people bitter, also people will naturally be bitter when the thing they strive for the most is out of reach and they feel the people who have it don’t appreciate it or deserve it because they got it easily.

So now people over 57 don’t appreciate or deserve their own homes?

The boomers I know are extending already decent sized houses so the can live on the ground floor if necessary. They won't be budging.

@XingMing The current lag in the assessment is 31 years! That's how outdated our Council Tax system is! If we got rid of stamp duties etc and only had 1-2% annual house value tax, the councils wouldn't struggle, our schools would be funded better and we wouldn't have anywhere near the current housing crisis we're facing at the moment. This isn't a revolutionary idea, it's a tried and tested model across most of the developed world.

but it does annoy me when they claim life was just as hard for them in regards to buying property (the facts show it definitely was not) and because they didn’t have modern technology or weren’t eating avocado on toast etc, it is usually twinned with advice about how young people could buy property like they did if they just tried harder or saved more. It’s this failure to acknowledge as a generation how lucky they were in regards to property/jobs/finances that makes people bitter, also people will naturally be bitter when the thing they strive for the most is out of reach and they feel the people who have it don’t appreciate it or deserve it because they got it easily

I’m 57. Born in 64. I’ve never said it thought like that in my fucking life. Stop talking crap.

It’s this failure to acknowledge as a generation how lucky they were in regards to property/jobs/finances that makes people bitter, also people will naturally be bitter when the thing they strive for the most is out of reach and they feel the people who have it don’t appreciate it or deserve it because they got it easily.

I assure you, when you are 79 there will be lots of resentful 28 year olds telling you how good you had it, how guilty you should feel that they don't own your house, and how selfish you are to still be alive.

@TheYearOfSmallThings "I assure you, when you are 79 there will be lots of resentful 28 year olds telling you how good you had it, how guilty you should feel that they don't own your house, and how selfish you are to still be alive."

Perfect example of inter-generational frustration right here. It's our fault for electing politicians who prioritise populist policies over economic fundamentals.

I think the government should definitely review stamp duty for people downsizing. Like you say, there are lots of boomers in £1million+ houses who would likely love to downsize to say a nice £800k bungalow, but the stamp duty puts an immediate stop to it.

My parents were born in 1948. They were thinking of downsizing but now look after my niece and nephew while my brother is at work (their mum is not around much). Around our way many grandparents provide childcare, so there might not be as much downsizing going on as you'd think.

I think the government should definitely review stamp duty for people downsizing.

The gov generally get about 10bn a yr from SD, they need that money. If it's not from SD it will have to be from a different tax

@ArseInTheCoOpWindow so because you personally have never said that no one else does? You must have missed countless articles telling young people they can’t afford houses because they spend money on avocado on toast or they should stop complaining and just live with their parents until they’re 30 or move to the opposite end of the country, to quote property expert Kirsty Allsopp.

And yes of course people deserve their own homes, but do they deserve a one million pound house they only paid £100k for? No, no one deserves their house to have increased in value ten fold, they’re lucky that happened, it wasn’t down to their hard work.

[quote ledbydonkeys]@Salisburyspire "They don’t all look to be super wealthy judging by some of the slightly overgrown gardens etc"

An American couple I knew from work once told me the reason they were really disappointed with the property market in the UK is they would have to spend £2M+ on a house in London "only to live next to people they wouldn't want as neighbours" and that it would never happen in the Palo Alto!

Your comment reminded me of that! I know you didn't intend it (I hope) but I can understand why you asked the question.

The issue is pretty simple, in most countries, you pay a portion of the value of your house as tax (usually between 1-2%), annually, and the transaction costs of selling and buying houses are a lot lower. This makes the market function much "fluidly" as there are always people downsizing once they no longer need a much larger house. This also limits property hoarding by large commercial landlords, people who want to rent a house for a few days in the year for AirBnB etc.[/quote]
What an odd comparison. Palo Alto is not a big city, it’s an extraordinarily expensive suburb where the housing stock is nearly all single family detached houses with gardens. Obviously it’s nothing like London. The most expensive US cities are NYC and San Francisco, both of which also have some of the highest rates of homelessness and poverty. That’s life in a big city. I wonder why nobody steered your friends toward somewhere like Surrey as that is much more like what they are used to in Palo Alto.

I scrimped and saved and lived in shitty horrible flatshares for years to afford my first mortgage. Which I got when I was 32. The only reason I could afford to buy a tiny flat in a really dodgy bit of London is because of the massive property crash of the 1980s where millions of people were left paying massive mortgages on property which was worth less than they'd paid for it.

If you're going to make out that previous generations lived in easy street, make sure you know your history.

@ArseInTheCoOpWindow so because you personally have never said that no one else does?

But you tarred them all with the same brush. ‘That generation’

I’ve got lots of friends in ‘that generation’. None of them think like that. Not one. Most think young people have been totally shafted financially and it’s appalling how we have such low wages and the rest.

I just qualify as a baby boomer and would be happy to move for several reasons. However I want to stay in the same area (work, friends, social life) but there isn't anything to move to, other than flats with small communal gardens. I want a garden of my own - doesn't have to be big, just a patch of grass with patio. I'd be happy with a 1-2 bed house or bungalow, but all the bungalows in our area ( there were only a handful) have been extended into houses so even that option is off the board.

Until housing developers start building homes that Baby Boomers want, very few will be moving, simply as there isn't anything suitable to move to.

I totally except comments and suggestions made by others, about incentivising down-sizing, about moving sooner rather than later. and I agree it's a shame that families are unable to access suitable accommodation as well.

Those countries with a % tax value who values the house?

If you're going to make out that previous generations lived in easy street, make sure you know your history
That's pretty chippy , Ive not seen that . I have seen the intergenerational bun fight. Neither side see the other side.

@CollyFleur

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?

This! My mum was taken out of her house in a box and my DF wants to go the same way. Why should he downsize, he has spent 20 years getting the house exactly how he wants it. With regards us, I would love to move into a bungalow but they are like dolls houses round me, I have spent a lifetime collecting stuff that I don't want to get rid of, wouldn't have a hope of getting in a modern bungalow!

And yes of course people deserve their own homes, but do they deserve a one million pound house they only paid £100k for? No, no one deserves their house to have increased in value ten fold, they’re lucky that happened, it wasn’t down to their hard work.

I bet you will happily bank the inheritance from your parents expensive mortgage free home when the time comes which you have literally have done nothing to deserve or worked hard for either won’t you.

Incredible sense of entitlement on display here. Some of these comments seem to be suggesting that if we have the temerity to live close to a good school after our children are beyond school age, we should be forced to move on. Ditto, if we have the gall not to keep our houses decorated in accordance with the latest Instagram trends so they are 'outdated'.

Well, sorry, we're not going anywhere. We have as much right to go on living in our community as anyone else.

@Totalwasteofpaper but what exactly has it got to do with you if someone doesn't maintain their house? Do you look at grotty one bed flats or tiny two bed terraces and bemoan the fact that their owners haven't kept the outside looking sufficiently 'Homes and Gardens'. I bet you don't!

[quote Elsiebear90]@xingming it’s not a benefit to live in a house that’s worth a million pound when you paid 1/10 of that? Of course it is, you can pay your mortgage off much sooner and have a better standard of living that anyone trying to buy the same house now as first time buyer, you can also release equity.[/quote]
The reason boomers houses are worth more is inflation. If we have years of high inflation in 20 years young people might be saying how lucky you were to get a house for £600k because it would cost them so much more.

You also have to remember we don't all live in london or the South East, there are large parts of the country where a family home costs nowhere near £1million and although houses will have gone up in value it will be in tens not hundreds of thousands. If I'd stayed in the first house I bought in 1973 I would have made money, about £125,000 so nowhere near £1million.

We didn't know when we took on what were large expensive mortgages that the housing market would do what it did. You don't know what it will do in the next 20 years.

You don't know what it will do in the next 20 years.

I personally don't think we will see anything like the historical growth. FTBs are much older, the bottom rung is very high, wage stagnation & costs of upsizing makes it much harder to gain equity.

@ChiswickFlo

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

So I get 2 1/2 years of retirement before I get shuffled off? Bollocks to that!

I’m on the cusp of gen x and millennial. I find it offensive that “old people” should just walk away from much loved homes so that younger people can invest in property. There is a huge sense of entitlement amongst some (far from all) people under 45, a belief that they are seeing hardship like never seen before. It’s quite tedious. It’s not as simple as investments and money. It’s about homes. It’s about memories and gardens (if lucky) filled with carefully chosen plants. It’s about comfort of the years surrounding you. It’s about nice neighbours. It’s about feeling safe. Why should anyone older than me move from that to free it up for me? And many people choose new builds now for the instant sense of insta perfection and shiny newness, they don’t want doer uppers or indeed just living with it for a while whilst saving. Sadly as we are seeing in Ukraine, hardship and horror is seeing homes and lives obliterated. Not the worry of older people happy in slightly dated homes that they worked hard for and whether they should give it all up for the “more deserving”.

And many people choose new builds now for the instant sense of insta perfection and shiny newness, they don’t want doer uppers or indeed just living with it for a while whilst saving.

I take issue with this point. Many people buy new builds because of help to buy/shared ownership schemes as they can't save the deposit for a doer upper. Many also stretch themselves for the mortgage so can't afford the work needed for a doer upper. I was looking at doer uppers last yr as I like a project, I couldn't find one that was worth it once you factored in the building costs.