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?

[quote Elsiebear90]@Elsiebear90 if tall people created or were part of a system where they benefited hugely at the expense of future short people, and then claimed you (as a short person having to jump through more and more hoops to try and get what came relatively easy to most tall people) shouldn’t complain about it because you’re just not trying hard enough, then you would have every right to feel bitter towards them.

I don’t personally feel bitter towards boomers just because they just took what opportunities were there, I can’t blame them, I would do the same, 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.[/quote]
Such nonsense. Aside from the stupid avocado/tech comment, it's ridiculous to suggest that a generation have failed to acknowledge how easy it was for us. Firstly you are generalising about millions of people; secondly I'm not sure what these millions of people being grateful would achieve. Do you think it might bring prices down?

As for us having had it easy - hollow laugh. Life was utterly perfect for women in the 70s and 80s of course...

@ledbydonkeys

Many people become carers (sometimes overnight) for loved ones irrespective of housing supply &/or house price inflation.

The benefits & advantages of multigenerational homes are not about elder or disability care, although staying at home with family care may well offset or delay residential care.

Nobody should be forced to care.

We're boomers and have no intention of moving again - indeed we moved two years ago to live near our daughter and sold our large cottage with very large garden and bought a four bed house with a small garden. Ironically we bought it from a youngish couple with three children, and while the house looked ok in general there were actually a few nasty surprises maintenance wise - blocked drainpipes, dodgy plumbing and gas fire - so it's not just us oldies who can't maintain their houses!!!!!! We have an extra reception room downstairs that can be used as a bedroom if needs be, hopefully much later on though.

We intentionally found an area where we we are much nearer to services and shops (within walking distance) and are only a bus ride to the nearest city - so future proofed ourselves in that way. I believe there's a kind of covenant between the old and young - we provided a sizeable house deposit for our children and now also look after our grandchild a couple of days a week to save nursery fees. We're fit and healthy, so why wouldn't we? And also, when the time is right, our daughter is aware that there are more funds available for them to upsize their house.

We live in a lovely area, but we're certainly not talking millions for a large house. People are entitled to live in whatever size of house they want, what suits one person wouldn't necessarily suit another. I couldn't bear to be without a garden, for instance, so being in a flat would be a no from me. If needs be I'll skip that step and go straight into the dreaded care home!!!!

[quote Elsiebear90]@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]
The point you miss entirely is that it isn't the public's fault that house prices have increased the way they have. Take your bitterness out on the politicians who brought those market conditions about.

@Rickrollme “ 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 wasn’t their point. Their point, which was the same as the OP, was that when you spend £2M and buy a house in London, your neighbours aren’t really in the same “social class” as you (hence the comments around unkempt gardens etc). They’re usually people who are not quite as well to do, but happen to live there because of house prices dramatically rising over the years. This isn’t very normal in the US as people who live in a neighbourhood tend to all be “on the same level” as they pay a % value of their house annually in tax. That was the point my friends and the OP were unfortunately making.

@beddygu. I do take your point about share ownership and of course that is true. But the desire for instant perfection is real in some cases too.

@ancientgran “ The reason boomers houses are worth more is inflation.”

No it’s not. The vast majority of the price increases can be attributed to 2 key policies: 1. Interest rates being the lowest rates ever for a decade (changing very quickly though) and 2. Help to Buy actually making it easier for developers to sell crap housing at inflated costs to prop up the lower end of the housing market. There’s been plenty of economic studies that show the impact of these two policies on the housing market.

This isn’t a boomers did x y and z. They were just lucky. The blame lies squarely with the politicians.

But the desire for instant perfection is real in some cases too.

Of course, I just don't think it's the main driver for the vast majority.

In my area there is a specific community of empty nesters living in the bigger houses that object to literally every single proposed new development in the village.

I don't know where some people expect everyone to live if they don't want new homes to be built but also don't want to give up their own homes once they don't need the space anymore.

Hang on, perhaps I phrased it badly as there seem to be some comments flying around about social class. We are not claiming we maintain our own home perfectly and nor was I suggesting anything about social class! Apols if that’s how it came across. We are just boring professionals, foreign, so not at all posh. The area we are looking at is quite established. The older people who live there are a mix of ex middle income and well to do. Not much deprivation to be honest. The reason SOME prob can’t maintain their properties are down to complex reasons including now perhaps living on a fixed income. I think ‘class’ wise they are higher up the social ladder than us (wouldn’t be hard to be honest!) Income-wise, probably not so much now that they’re no longer working (apart from a handful on six figure annual pensions which would be few surely)

@Salisburyspire Ah! Then it’s only my friends then who were being a bit snobbish

@LoveLabradors I’m probably not too much older than you. When I say dilapidated homes, I don’t mean houses that are not Indra-worthy. I mean the house that I viewed that had not been touched since the 1960s including the electrics and kitchen that was on for more than £2.6m! The garden was a jungle. The estate agent’s pics did not show the extent of the work needed, ceilings collapsed, damp walls. A friend who is an architect said it would take another £800k to renovate. Our own house is by no means perfect and it is a running joke with my neighbour. Yes we have extended and lived with the upheaval of building work but it is very much a lived in house with kids’ toys etc everywhere.
I do want more lateral space and a bigger garden but primarily want to be closer to my DCs’ schools. When I say we would like to upgrade it is more the area that is driving the house price. We could afford a small terrace for our decent sized house in that area but we are not ready to downsize. I’m actually looking for two storeys and not a three storey townhouse which is what we have and which I would not want to grow old in as the stairs will be too much and Victorian houses just seem to need more £ spent on maintenance.

@ChiefInspectorParker we too have benefited from London property price rises but our area just hasn’t gone up as much despite amazing houses and fab transport links as this particular leafier area. Our area is more ‘cool’, target one is more established but alas that’s where the schools are.

I am a crossover between the baby boomers and generation X. I will be seventy in 2035 - hardly in my dotage. My husband is a few years older but will still only be in his mid-seventies at that time. In common with others of our generation, we have worked hard and finally became mortgage free in 2020. We are finally getting our home the way we want it. Our children are grown up but come back to stay. Hopefully in due course there will be grandchildren coming to stay. Yes, we live in a four bedroomed house but it is not worth the millions in our area that some people seem to think it might be. Why should we be expected to move out into a smaller house that we would have to start at the beginning again to get how we like it? This is our home that we love. We have made sacrifices for our children and now it is our time. We will move when we are ready to and can afford to and not because someone thinks we are selfish for enjoying the home we have lived in for many years and made the way we want just because they think they are more deserving of it by way of having young children. It is not as clear cut as some people seem to think.

[quote ledbydonkeys]@ancientgran “ The reason boomers houses are worth more is inflation.”

No it’s not. The vast majority of the price increases can be attributed to 2 key policies: 1. Interest rates being the lowest rates ever for a decade (changing very quickly though) and 2. Help to Buy actually making it easier for developers to sell crap housing at inflated costs to prop up the lower end of the housing market. There’s been plenty of economic studies that show the impact of these two policies on the housing market.

This isn’t a boomers did x y and z. They were just lucky. The blame lies squarely with the politicians.[/quote]
Oh right you are, so house prices haven't increased in price because you know that is what inflation is. Have you never heard of house price inflation?

Property dynamics are different regionally. Here in the rural SW, property prices have gone (relative to historic trends) completely ballistic since WFH arrived. Now everyone's house in Cornwall has increased £100K in value and it is about that young families can do London jobs and still go to the beach at 3.30, so of course everyone wants to give their children that perfect life. Such parents almost certainly plan to visit the big London world class museums when they visit their parents who still live in London.

Interesting that people seem to think the world revolves around what they want. @Violinist64 says she will do what is right for her household, and most people say likewise. With apologies to those who disagree, individuals are going to make their own choices, and that doesn't mean I shall be moving when someone with a young child wants to move into my postcode just for the school catchment area. Make your current area better.

I wonder if ‘boomers’ are more attached to their homes because they tended to buy early and stick (it was worth their while to do so)? My MIL at 74, has lived in the same home since she was 26 and she will never leave. At 33 I can’t imagine doing that but then perhaps my generation is either not able to afford to buy a house or only able to afford something which doesn’t really meet their needs (my situation) and therefore are always looking for the next step.

We are desperate to get a bigger place but the next wrung up the ladder is substantially more expensive. The road next to us is full of such houses and they are, by and large, lived in by retired couples who must rattle around in there. But then I’ve always envisaged downsizing once my children are grown settled so perhaps a different mindset.

@ancientgran yes, but "house price inflation" is not due to inflation - that is, the increase in the RPI or whatever - it's far outstripped the increase in other costs.

Going by my own parents, the boomers won't sell, they'll part with their house when they die. Then the kids might sell. Or keep the house, if it's more convenient.

@Poorlyplants I don’t expect or think I deserve inheritance of any kind, I’ve encouraged my parents to release equity and enjoy their retirement. It’s not my money and I don’t expect it. If I was lucky enough to receive any inheritance I would acknowledge how lucky I was to receive it, not say how it doesn’t make me more privileged than someone who doesn’t.

Is it really that hard for people to admit they got lucky and understand why some young people who are having an incredibly tough time trying to get on the property ladder might feel resentful?

I own my own home, it was bloody difficult getting it despite us both being working professionals and not having any family help. I’m not bitter, I’m lucky I live in a part of a country where housing is relatively affordable, but I understand why some people who live down south who have no hope of ever affording a house might be.

@Elsiebear90, I feel the same as you. I live in the southwest where housing was relatively affordable and isn't now, but even 32 years ago getting started on the property ladder was uphill miles for years. I think you are being dismissive of the barriers to buying a home then because they are not the same ones you face. It has always taken time and planning and saving to get going. It has become vastly more difficult for anyone on "average" money to achieve.

Downsizing doesn't necessarily bring much in the way of benefits. When my parents looked into it, house prices meant that new builds were no cheaper, just smaller. Bungalows tended to need doing up, so costs and hassle of having work done. Then stamp duty and moving costs were a big chunk of money. Same for several of my friends parents too. Unless there is an incentive to move and suitable places to go, why would they? My issue is that I would happily downsize when the kids are gone, but would like a much bigger garden. Not sure that place exists.

MrsCremuel's mum is I guess quite unusual in staying at one address for so long. Until my current address, as a young adult I moved frequently. I have lived at my current address longer than I have ever lived anywhere else.