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Parents Want A House Price Fall To Help Their Children Get On The Property Ladder

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http://www.dailymail.co.uk/news/article-1314121/Parents-want-house-price-FALL-help-children-property-ladder.html?ito=feeds-newsxml

A third of middle-class parents are hoping house prices fall to help their children buy their first home.
The research finding highlights the widespread fear that the children of today are facing a lifetime of renting.
That contrasts with today's householders, many of whom were able to buy their homes at relatively low prices.
The study, from the National Housing Federation, also found that nearly 60 per cent of parents feel obliged to give their children money for a deposit.
They expect to hand over at least £20,000 to each of their children to get them on to the property ladder - in what is known as raiding the 'Bank of Mum and Dad'.
The research is based on a poll of more than 500 middle-class parents with children between the ages of 20 and 30.
They have been the winners of the house price boom over the past decade - but their children are the losers.
And they expect that the only chance that their children have of buying their own home is for them to hand over a substantial amount of money.
In 1997, the average home cost £68,500. Today, the figure stands at nearly £168,000. The increase of £100,000 is well ahead of inflation and equivalent to four times the national average salary.

HPC is gaining in popularity.

Edited by Pent Up

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http://www.dailymail.co.uk/news/article-1314121/Parents-want-house-price-FALL-help-children-property-ladder.html?ito=feeds-newsxml

A third of middle-class parents are hoping house prices fall to help their children buy their first home.
The research finding highlights the widespread fear that the children of today are facing a lifetime of renting.
That contrasts with today's householders, many of whom were able to buy their homes at relatively low prices.
The study, from the National Housing Federation, also found that nearly 60 per cent of parents feel obliged to give their children money for a deposit.
They expect to hand over at least £20,000 to each of their children to get them on to the property ladder - in what is known as raiding the 'Bank of Mum and Dad'.
The research is based on a poll of more than 500 middle-class parents with children between the ages of 20 and 30.
They have been the winners of the house price boom over the past decade - but their children are the losers.
And they expect that the only chance that their children have of buying their own home is for them to hand over a substantial amount of money.
In 1997, the average home cost £68,500. Today, the figure stands at nearly £168,000. The increase of £100,000 is well ahead of inflation and equivalent to four times the national average salary.

HPC is gaining in popularity.

A journalist has decided to ask the population what they think, how radical!

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Of course helping one's children in this way, whilst well-meaning and sensible at the individual level simply causes the Ponzi to be fed with the gains from its own pyramid and cements the middle classes into their privileged positions.

Class isn't only about wealth.

What this does is increase the divide between rich and poor. It is the slow destruction of the 'middle class', since it is the end of meritocracy.

(Except it isn't, because the crash will shake things up a bit. I still suspect that the main effect of the crash will be a sorting of the middle classes into 'rich' and 'poor'.)

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Of course helping one's children in this way, whilst well-meaning and sensible at the individual level simply causes the Ponzi to be fed with the gains from its own pyramid and cements the middle classes into their privileged positions.

That's the real agenda.

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My kids wouldn't dream of asking me for a loan to buy a house, they know my feelings well.

One of them bought a house about three years ago (not in UK) which is now worth less than they paid for it, (surprise, surprise) but they're convinced it will go back up soon so they're happy :rolleyes:.

I've just lent them the money for a swimming pool, as swimming pool prices always go up :lol:.

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Just a thought, feel free to shout me down -

Do people think it's possible that political pressure for lower house prices might come from boomers [and don't forget that the UK's population spike comes in the mid 60s - the kids of those boomers are in the main a little young to be housebuyers but very soon won't be] belatedly working out the impact of high prices on their children?

Or does feathering their own nests remain the primary concern?

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Just a thought, feel free to shout me down -

Do people think it's possible that political pressure for lower house prices might come from boomers [and don't forget that the UK's population spike comes in the mid 60s - the kids of those boomers are in the main a little young to be housebuyers but very soon won't be] belatedly working out the impact of high prices on their children?

Or does feathering their own nests remain the primary concern?

I don't think it's meaningful to speak about people born in the mid-late 60s as Boomers, even though the UK's demographic delay relative to the US does mean our baby peak was later. The UK generation corresponding to the US Boomers was born around 1945-1960. That generation's children are very much the priced-out Generation Y.

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I had a similar conversation with a very recently retired teacher the other day.

At first, she was pleased that her house that she bought in 1995 for 95k is now worth 250k.

After a bit more of a conversation, she came to the following conclusions (after a few admittedly leading questions) :

- Her current house price is not relevant to her. She has to live somewhere and wants to stay in her current home for as long as her health allows, hopefully into her 80s.

- She is house rich but relatively cash poor although she has a good pension.

- Having a house worth more than she paid for it is down to luck and not skill.

- She is very debt averse and will not take out a loan to give her 32 year old son a down payment.

- High house prices mean that the only way that her son (who is also a teacher) can afford to buy a house is for her to die.

- Her son cannot possibly replicate the lifestyle that she enjoyed at similar stages in life for as long as house prices remain high.

I think that the conversion from wanting HPI to wanting a HPC is happening very slowly and that individuals are ahead of the main stream media in coming to this conclusion.

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Surely they'll be too busy spending the inheritance on skiing, ocean cruises and round the world trips to notice? :P

Edit: Added :P just to be clear...

Edited by efdemin

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I really am worried about how my kids will ever be able to buy a property. Nobody ever seems to point out that if future generations don't have to spend all their money on a mortgage they can spend it on other stuff - surely this would help the economy rather than a huge proportion of income going to the banks.

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I really am worried about how my kids will ever be able to buy a property. Nobody ever seems to point out that if future generations don't have to spend all their money on a mortgage they can spend it on other stuff - surely this would help the economy rather than a huge proportion of income going to the banks.

Good Lord, Gary, you've got it!

dum-di-dum-di-dum

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I really am worried about how my kids will ever be able to buy a property. Nobody ever seems to point out that if future generations don't have to spend all their money on a mortgage they can spend it on other stuff - surely this would help the economy rather than a huge proportion of income going to the banks.

That is correct, of course.

But one thing that HPI does do is bring consumption forward. It doesn't, obviously, increase total net wealth but it does mean that, through sales proceeds and equidee release, there's more money to spend now. If you were a central banker or a politician would you be more interested in consumption now or total consumption over many years to come?

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Just a thought, feel free to shout me down -

Do people think it's possible that political pressure for lower house prices might come from boomers [and don't forget that the UK's population spike comes in the mid 60s - the kids of those boomers are in the main a little young to be housebuyers but very soon won't be] belatedly working out the impact of high prices on their children?

Or does feathering their own nests remain the primary concern?

Think you could be right. It's all about priorities: It's all fine and dandy enjoying the feeling of self-satisfaction achieved through the knowledge that your 'canny investment' has done rather well...until the day comes when your kids start trying to tap you up for a fat 'ole deposit for a house - easier to live without the self-satisfaction than with a pension fund 20K lighter...

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That is correct, of course.

But one thing that HPI does do is bring consumption forward. It doesn't, obviously, increase total net wealth but it does mean that, through sales proceeds and equidee release, there's more money to spend now. If you were a central banker or a politician would you be more interested in consumption now or total consumption over many years to come?

I'd be more interested in sustainable growth, but hey, I'm not in charge.

HPI absent wealth creation makes your economy less productive and prone to catastrophic bust. Fact.

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Sounds as though the middle-class parents are beginning to realise that without lower house prices Timothy, Felicity and Veruca might well be living at home for the rest of their working/unemployed lives. That'll put the skids on their plans to "downsize".

One of my friends from school moved down to the southwest with his parents when they retired there a few years ago (he was 22 at the time). I bumped into his Dad in town before they went, he begged me to convince my friend to move out into a shared house in town rather than come with them. As somebody who has always strived to go it alone I agreed at the time, but after thinking about it for a while I couldn't really fault my friend's actions. He was working for £6ish an hour and taking home maybe £200 on a good week. If he'd moved out he would have been paying £100-£120 of that in HMO rent and utilities, then take off another £40-50 for food and transport and you are left with the princely sum of £30-60 to live on. The guy would have struggled to save £1000 a year for emergencies, and he would have been much better off knocking some girl up and living on benefits.

As it was they all moved down together and he lives in a small room in their new house, he has been there a few years and they all seem to have settled okay. He is working and has paid off his student debts completely and amassed a nice sum for a deposit on a house one day. He is able to save a lot more than me, even though my work pays much more than his, because I pay rent and council tax in an HMO in London. So who was the fool? Yes his parents didn't want him to come at first, but he is quiet and clean, doesn't cost them anything and is around to help out with lifts and errands so I don't think they are suffering greatly.

He really wants to move out but realistically, the price of a starter house/flat in his small town is going to have to hit £40-50k before he has much of a chance to buy, and that is about a third of what they are now. Rents are just as high as they were in his old town and he sees renting as 'dead money'. I expect the correction will happen one day, but until then his life is on hold.

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We're sorry but reader comments are currently unavailable.

Read more: http://www.dailymail...l#ixzz10GZizm00

Why have the Mail withdrawn or censored all the readers comments?

Send the columnist [becky Barrow] an Email and ask her:

b.barrow@dailymail.co.uk

Edited by Dan1

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We're sorry but reader comments are currently unavailable.

Read more: http://www.dailymail.co.uk/news/article-1314121/Parents-want-house-price-FALL-help-children-property-ladder.html?ito=feeds-newsxml#ixzz10GZizm00

Why have the Mail withdrawn or censored all the readers comments?

They seem to be unavailable on other articles too.

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They seem to be unavailable on other articles too.

Ah. Some sort of site update then? I'll check later.

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I was born in 1960 so I guess I am a late boomer.

This article rings true with me. My kids are now in their teens and my main reason for wanting sensible house prices is so that they get the same opportunity to buy homes in their twenties that my contempopraries and myself had in the 1980s.

Our mortgage is nearly paid off and we have no intention of ever moving. The value of our house therefore, is totally irrelevent. I would far rather house prices collapse and my kids get a chance than they have to hang on for us to die - that cou;d be another 40 years!

Not all boomers are obsessed with the value of their house.

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I really am worried about how my kids will ever be able to buy a property. Nobody ever seems to point out that if future generations don't have to spend all their money on a mortgage they can spend it on other stuff - surely this would help the economy rather than a huge proportion of income going to the banks.

I think you meant "surely this would help the government as they can raise taxes to take some of the increased disposable income, rather than a huge proportion of income going to the banks."

This is why I believe the gov want lower prices; they need the taxpayers of the day have higher disposable income to tax, rather than let the property-is-my-pension brigade fritter it away on a luxurious retirement....

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I think you meant "surely this would help the government as they can raise taxes to take some of the increased disposable income, rather than a huge proportion of income going to the banks."

This is why I believe the gov want lower prices; they need the taxpayers of the day have higher disposable income to tax, rather than let the property-is-my-pension brigade fritter it away on a luxurious retirement....

... in Spain.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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